



iiiiiiiiiilBi 



iiiiiii' 




'■f. .^^ 



v*^ 






0> ■fr'. 



,^ ■^*. 



^■,s-.<^"- 



. \ 









,0 c 



5 •/;, 









\^' 






'-y^ V 



v>- /-. 



<^j. <? 



v\^^ 






N.^ -■'■_- 



' -^M^:^. -^ /" /'^"^n 



* "b-. 



O 0' 












'^1=5., ' 






* - ■^'<- v. 






^-'■. 






=^ 0^ 








;5 'U^ 


















"%: 


4 .^ 


, .. ' 




> 




n" 






\ 


/■ 






.^^^' 


^/•. 

■>'. 



■X^ , -^ •• „ ''' 














c 


\ 






^ 








-?= 


















.^^' 






' 


% 


/ 




s^ 


%■ ' 






"" » 


aN^' 


■V 


w 


0~ .«!>' 














» s- 




^ 


' -f- 




V' 






'O'^ 






'"fj^ 


V^' 


-" 






■''^. 


<^ 






°^. 


"T- 








c> 1 . 




0- 










. « ^ 




7 


■ . ^ 


' "/ 


\^ 


'■^^. 


.^^ 












.\' 


v^ 


"^ 



X 

'• '^ 






0^ 






,0^, 






■^# 






<.•■ .<.^ 



■^'o.' 



>r>^ .^ .,^'- 



,0 o. 



'OO' 



'^^_ « ., . o > .0- 



.A^ 






%^.v^ 



.x-^- 



aV 



,X^' '-.r 



A^"V 



.V ."-'■«. 



^^.. s^^ 



,a 






.0 C, 



'V- V? 






a' 



', -'b 






-s-. 



aV ■/-, 



.A^' 






u^ 


'\ 








v' - 






> »S' 




^^ '^^ 



''>- y 



xO^c. 



'.,,.* .,x 






,^ ■'^. ' 







■J 


\^^ 


>;:;^^- 


^ 




\ 


»■ . s 






•<= 0^ 








M> -'j. 












•y- 



.\\ , » "^ ' ^ '-'i 






V' 



.0- 



> V . . . 



J ,x>^^' -V 



^- X' 



./ V. 






vO O. 



0. '> 






0^ 






v>- 






,A 



^■ 



"b- 



S.S- 



-o <V. '0,1.* ,A O '/, ^^s ,0 






♦ -*^ 



^l^^''^ %, .^ 









.p\' 



'•'■■■ ' - a"^ - 



.«„;%»«-' ^^' 



.^-^ •'^>. 






.^iCV '. 



,0 o. 






,.^^^- 






"V/-, ,a'<' 



.<-^' 



vX' .P 



^..^ 



A" 




o 



o 

O 



JZ 

< 



O 
>- 

U 
u- 

o 



■^ 



m , 



■At, 



^' 



.Mi, 



fW.^'^^ %• /' 






of 



•^^ 



mn'mmm^ 



^r \ 



'mW 



iVmmiitt-,p.mtk^)f^J\a0itr!atto .^^ 



J 



n-^, 



;<; *.-** 






'// 









5!*. 



«/ 






■^^ 



-t,^- 



'^^• 



t-J '•■^- 






.-^r. 



K t 



•< »■ 



i» 



a 



•♦»- 



•i4s^'- 






P 



H. 



^^' 
/- 



^^, 









C'-- <■ 



^ 



^>'*. 



^^/, 






*)' 



h. 



■f^^ 



-fr# 



x 



%.^ 



-V 



v> 



e 






■#^ 






%- 



s 



■■^ 



f*"'?r* 






^: 



AMERICAN 
BANKERS ASSOCIATION 



SOUVENIR VOLUME 
OF THE WASHINGTON MEETING 



COMPILED AND EDITED BY 

WILLIAM VAN ZANDT COX 

PRESIDENT, SECOND NATIONAL BANK 
CHAIRMAN, COMMITTEE ON SOUVENIR VOLUME 



Presented by Bankers Association of the District 
OF Columbia to the Accredited Delegates to the 
31ST Annual Convention, October 10-13, 1905 

[I] 



USRARVor ,iONOf»ESS 
Two Coprtu rtouxvoM 

: .:r'i'- tnif» 

I /n 7 f y 

I copr B. 



(Umiunittrr nii *nmirnir tUilmnr, 
JJriutimj a^l^ yrnpram 

WILLIAM V. COX, Chairman 

W. P. VAN Wir.KLE, Secretary 

MILTON E. AILES JOHN B, I.ARNF.R 

MARCUS BENJ^M1N THEODORE W. NOYES 

W. C. CLEI'HANE ANDREW PARKER 

JOHN F. CROWELL EDGAR D. SHAW 

JOHN C. ECKLOFF JOHN B. SLEMAN, Jr. 

JAMES F. HOOD J. KENNEDY STOUT 

THOMAS HYDE J. ShLWIN TAIT 
JOHN F. WII KINS 



COPVRIQHTKD, lOOS, BV 

BAK-'KEItn A.t3»OCIATIUN OF THE 

Tn HTRI C-T O K Co I, V M HI A 



PRESS or 

W. F. Roberts Company 
Washington City 




INTRODUCTION 



WHEN the preparation of an appropriate 
souvenir for the Washington meeting of 
the Bankers Association was assigned to me by my 
colleagues in the Bankers Association of the District 
of Columbia, it seemed desirable, as the National 
body was to meet in the Capital city of the United 
States where the great tlnancial transactions of the 
Nation are so elaborately conducted under the man- 
agement of the Treasury Department, that a volume 
to consist of a series of chapters each of which to be 
written by the most competent authority in the 
Government on the various functions of the Treasury 
Department would be most appropriate. This sug- 
gestion was submitted to the Executive Committee 
of the Bankers Association, the members of which 
gave it their hearty approval, and that cordial 



IV Introduction 

endorsement made it soon possible with the friendly 
assistance of Secretary Shaw to secure the able series 
of papers that constitute the section on "National 
Finance" in this volume. 

No visitor to Washington should ever leave our 
city without acquiring some knowledge of the many 
phases of the special life at the Capital, and accord- 
ingly under the heading of " Washington, City and 
Capital" there is presented a series of papers, intro- 
duced most appropriately with one written b\' the 
President of the Board of Commissioners of the 
District of Columbia, devoted to those characteristics 
which are peculiarly our own. These papers have 
been prepared by well-known writers whose names 
will be recognized as those fully qualified to discuss 
the subjects on which they have written. 

The local "Financial Institutions '" are properly 
worthy of consideration and we are proud of them. 
Five papers, therefore, are contained in a final section 
in which is given an account of the beginnings, 
development, and present condition of such institu- 
tions in the District of Columbia. 

An important feature of this volume is the illus- 
trations. These have been selected with great care ; 
some of them are from private collections whose 
owners have kindl\' permitted their reproduction for 



Introduction 



our guests, others are from official sources and their 

use allowed only for special events; while still others, 

representing well-known views, have been taken 

specially for this work. This is particularly the case 

of the panoramic view of the White House, the 

negative of which was immediately destroyed after 

the print was made. 

In conclusion it is a pleasure, as well as a duty 

to express my hearty thanks to the numerous friends 

who have helped to make this hook so attractive. 

To the members of my Committee 1 am under many 

obligations, and especially to Mr. Milton E. Ailes 

whose friendly suggestions have been most valuable; 

to Mr. J. H. Edwards, of the Treasury Department, 

whose interest in its success secured many official 

favors not usually available; and finally to Dr. Marcus 

Benjamin, whose skill and experience has in a 

large measure made possible the production of this 

volume in the short space of time available. 

w. V. c. 





PAGE 

INTRODUCTION mi 

TABLE OF CONTENTS vu 

LIST OF ILLUSTRATIONS xi 



NATIONAL FINANCES 



THE PUBIIC CREDIT j 

By Leslie Mortier Sh*w, Secretary of the Treasury 

THE TREASURY DEPARTMENT AS A BUSINESS INSTITUTION . ii 

By Horace A. Taylor, Assistant Secretary of the Treasury 

GOVERNMENT RECEIPTS AND DISBURSEMENTS .... 15 
By Charles Hallam Keep, Assistant Secretary of the Treasury 

THE CUSTOMS REVENUES 21 

By James Bronson JdwuoLDS, Assistant Secretary of the Treasury 

THE INTERNAL REVENUES 25 

By John Watson Yerkes, Commissioner of Internal Revenue 



THE NATIONAL BANKING SYSTEM AND ITS SUPERVISION . 
By U'illiam Bakrei Ridgely, Comptroller of the Currency 



THE MINT SERVICE 

By George Evan Roberts, Director of the Mint 

THE MAKING OF SECURITIES AND CURRENCY . . . . 

By Vv'illiam Morton Mekediih, Director of Bureau Engraving 
and Printing 



51 



37 



41 



VIII Table of Contents 

PAGE 

LOANS AND CURRENCY 45 

Bv Andrew Tyler Huntington, Chief of Division of Loans and 
Currency 

THE ISSUE OF UNITED STATES PAPER CURRENCY ... 51 

By J»mes Anthony Sample, Chief of Division of Issue 

THE REDEMPTION OH NATIONAL RANK NOTES .... 55 
By Thomas Eckstein Rogers, Superintencic'nt National Bank 
Redemption Agency 

REDEMPTION OF CURRENCY 59 

By Franklin Winfield Lantz, Chief of Division of Redemption 

I'UBLIC DEPOSITS IN NATIONAL BANK DEPOSITARIES ... 63 
By Eugene Benjamin \)kSK\M, Chief of Division of Public Moneys 

THE SECRET SERVICE 67 

Bv John Elbert Wilkie, Chief of Secret Service Division 

WASHINGTON, CITY AND CAPITAL 

THE NATIONAL CAPITAI 73 

Bv Henry Brown Floyd Macfaki.and, President, Board of 
Commissioners, Pistrict of Colutiihia 

NATIONAL POLITICS AND INTERNATIONAL DIPLOMACY IN 

WASHINGTON 79 

Bv HtNRY LiTCHFihLii WtsT, Co)nmissioner of the District of 
Colinnbia 

HISTORIC WASHINGTON 83 

By William Van Zandi Cox, President, Washington Board of 
Trade 

WASHINGTON AS A POLILICAL AND SOCIAL CLNTIiR . . . .S7 

By Gah.laki) Hi'Ni, Aul/ior of " Life of fames A/adison ," etc. 

WASHINGTON AS AN EDUCATIONAL CENTER .... 91 

By |omn Bell Larnfr. Counsellor at I.a7v, Washington City 

WASHINGTON AS A LITERARY AND SCIENTIFIC CENTER . . 95 
Bv Marcus Bfnjamin, Editor of '' Washington During War Time" 



Table of Contents 



IX 



WASHINGTON AS A FINE ART CENTER 

By Glenn Brown, Secretary, Aniericati Institute of Architects 



PAGF. 

loi 



WASHINGTON AS A CONVENTION CITY 107 

By Walter Collins Clephane, Attorney at Law, Washington City 

IMPROVING AND BEAUTIFYING THE NATION'S CAPITAL . . in 
By William Eaton Chandler, President, Spanish Treaty Claims 
Commission 

FINANCIAL INSTITUTIONS 

EARLY BANKS AND BANKING IN THE DISTRICT OF COLUMBIA . 119 
By Charles Elder Howe, Assistant Secretary, American Security 
and Trust Company 

THE BANKS OF THE CITY OF WASHINGTON 123 

By Milton Everett Ailes, I'ice-President, Riggs National Bank 

THE TRUST COMPANIES OF WASHINGTON CITY . . . .129 
By William David Hoover, Vice-President, National Safe 
Deposit, Savings and Trust Company 

SAVINGS BANKS OF THE CITY OF WASHINGTON . . . .135 
By John Ely Herrell, President, National Capital Bank 

FOREIGN COMMERCE AND INTERNATIONAL BANKING . .139 

By James Selwin Tait, Manager, International Banking 
Corporation 

APPENDIX 



Oyfrrz/f^r 



,.■■■..,.„.»■■. J.9... 




g j^ fjrc/taiti/f tirif/ttr^ t\'adhintli»n.h.(\ 





PAGE / 

View of City of Washington in 1905 Frontispiece 



Headpiece showing Gilbert Stuart's Head of Washington 
Tailpiece showing East Corner-stone of District of Colunnbi 



Headpiece for Table of Contents 



Headpiece for lllustralions 



ni 



ia ... V 



Old Staffordshire Plate showing White House and Portraits . . . vi 

From the collection of Mr. James F. Hood. 



VII 



Tailpiece Five Cent Bank Note '" 

From the collection of Mr. James F. Hood. 

Old Staffordshire Plate showing the Capitol Building . ■ . . . x 

From the collection of Mr. James F. Hood. 



XI 



Five Dollar Bank Note of Columbia Bank, 1852 xvi 

From the collection of Mr. Charles E. Howe. 

The Treasury Building from Lafayette Square .... facing ?, / 

Facsimile of Check for Forty Million Dollars Used in Settlement of French 

Panama Canal Company's Interests 3 

From a photograph obtained through the courtesy of Secretary Shaw. 
The Mint Medal of the Present Secretary of the Treasury ... 9 

Credit is due to Mr. C. N. Cruikshank and to Mr. Paul Brockett for designing the headpieces, and 
also to the firm of Leet Brothers for the use of many copyright photographs. 



XII Illustrations 



TAGE 

cut '■^'^'"g " 



United States Treasury Building about 1S53, from a contemporary Wood 

From the collection of Mr. James F. Hood. 



Portrait Headpiece showing Secretaries of Treasury Tliomas Ewing (1841) 

and Thomas Corwin (iSso-'oj) '' 

Wagon Unloading Chests of Coin on East Front of Treasury Building . 14 

Exhibit of Treasury Department, Louisiana Purchase Exposition facing 15 

From a photograph by Mr. E.J. T.iylor. 

Portrait Headpiece showing Secretaries of Treasury Daniel Maiming 

(i885-'87) and Lyman J. Gage (1897-1902) '5 

Facsimile of Treasury Seal ......••• '9 

United States Custom House, New York City . . . facing 21 - 

From a photograph of the accepted plan. 

Portrait Headpiece showing Secretaries of Treasury William A. Richardson 

(i873-'74) and Hugh McCuUoch {iS65-'69 and iS84-'85) . 21 

A Polariscope used in Custom House for Testing Sugars ... 24 

Portrait of Alexander Hamilton facing 25 

From a steel engravin,? by H. B. Hall, Jr. 

Portrait Headpiece showing Secretaries of Treasury, George S. Boutwell 

(i869-'73) and Salmon P. Chase (1861-64) 25 

A Mass of Currency Ready for Condemnation 29 

The First Bank of the United States facing 31 ^ 

From an old engiaving in the collection of Mr. \Villi.im V. Cox. 

Portrait Headpiece showing Secretaries of Treasury, Charles J. Folger 

(i88l-'84) and W.ilter Q. Gresham (18S4) 31 

Engraving National Bank Notes 3^ 

Melting Furnace in United States Mint facing 37 

Ingot Moulds from United Stales Mint 37 

Assay Mint Medal of 1901 4° 



facing 


PAGE 

41 ^ 




41 




44 


facing 


/ 
45 


ristow 






45 




49 



Illustrations xiii 

Bureau of Engraving and Prinliig, Wasliington 

Printing Bank Notes, Bureau of Engiaving and Printing 

An Engraver at Woik, Bureau of Engraving and Printing 

Exhibit of Engraving Processes of Treasury Department . 

Portrait Headpiece showing Secretaries of Treasury, Benjamin H. Bristow 
(iS74-'76) and William Windom (iSSg-'gi) 

View of the Treasury Building in 1804 ..... 

From an old woodcut in the collection of Mr. James F. Hood. 

Exhibit of Mechanical Printing of Currency .... facing 51 ' 

From a photograpll by Mr. E.J. Taylor. 

Portrait Headpiece showing Secretaries of Treasury Levi Woodbury (1834- 

'41) and Oliver Wolcott (1795-1S00) 51 

Medal Struck by U. S. Mint in Honor of First Steam Coinage in 1836 . 54 

Maceration of Old Bank Notes ...... f.icing 55 J 

Portrait Headpiece showing Secretaries of Treasury Richard Rush 
(i825-'29) and Robert J. Walker (iS45-'49) 

The Macerater in which Condemned Bills are Reduced to Pulp 

United States Mint Building, Philadelphia .... 

Portrait Headpiece showing Secretaries of Treasury Lot M. Morrill 
(i876-'77) and Chailes Foster (i89i-'93) 

The First United States Mint in Philadelphia 

From an old woodcut obtained tlirougll the courtesy of Hon. Robert E. Preston 

Counting Cash in Treasury Vaults ..... 

Portrait Headpiece showing Secretaries of Treasury Charles S. Fairchild 

(i887-'89) and John G. Carlisle (iS93-'97) 63 

Capital of a Column in Treasury Building ...... 66 

A Counterfeiter's Outfit ........ facing 67 

Portrait Headpiece showing Secretaries of Treasury William P. Fessenden 

(i864-'65) and John Sherman (i877-'Si) 67 





03 

53 


facing 


59' 


Morrill 




• 


59 


1. 


62 


facing 


63 / 



XIV Illustrations 

TAGE 

Safe of Secret Service Oflice ......... 70 

Plan of the City of Washington matie in London in 1793 ... 72 

From an original engraving taken from the Literary Magazine for 1793 in the collection 
of Mr. John B. Larner. 

View of the City of W.ishinglon in 1838 .... facing 73 
From an engraving in the collection of Mr. James F. Hood. 

View of the Capitol taken at Arlington 73 

Seal of the District of Columbia 78 

The cut for this illustration was obtained through the courtesy of Mr. Robert I,. Stone. 

The Capitol of the United States facing 79 ' 

View of the Washington Monument t.iken at Arlington ... 79 

The Obverse of the Diplom.itic Medal ....... 82 

Map of Washington during War Time with vignette of President Lincoln 

under fire at Fort Stevens in 1864, by James E. Kelly . facing S3 
From the collection of Mr. William V. Cox. 

Headpiece showing outline of White House and Monument ... S3 

Faciniile of Autograph of Robert Morris ...... S6 

From the col'ection of Mr. James V. Hood. 

The PeiTiion Building at President Roosevelt's Inauguration . facing 87 

Headpiece showing Stature of Daniel Webster ..... 87 

Ticket to Inaugural Ball of President Roosevelt 90 

The f^arnegie Public Library of Washington .... facing 91 

Hea^dpiece showing Toweis of Georgetown University .... 91 

Law Department and School of Diplomacy of George Washington 

University 94 

The Cosmos Club, Devoted to Literature, Science, and Art . facing 95 

Porlr.iit Headpiece showing John Hay and Joseph Henry • • • 95 

Sntithsonian Institution .99 



Illustrations xv 

PAGE / 

South Front of the White House, 1905 facing loi ' 

From a photograph taken specially for this volume. 

Headpiece sliowing Design of Justice from the IJbrary of the Supreme 

Court loi 

Ground Plan of Mall System ....... facing 104 

The Apotheosis of Washington by Brumidi, the Painting that Forms the 

Canopy of the Rotunda of the Capitol ...... 106 

Mount Vernon, the Home of Washington .... facing 107 ' 

Headpiece showing Arlington and Mount Vernon ..... 107 

The Corcoran Art Gallery . ..... ... 110 

The Library of Congress ........ facing \\\ ■'' 

Headpiece showing the Municipal Building of the District of Columbia . iii 

From a photograph of the Accepted Plan. 

The Medal Commemorating the Establishment of the Capital in the District 

of Columbia 116 

One Dollar Bank-note of Potomac River Bank, 1855 .... iiS 

From the collection of Mr. Charles E. Howe. 

Bank of Columbia, Chartered in 1793 ..... facing 119 -" 
Facsimile of Stock Certificate of Bank of Maryland, 1792 . . . 119 

From the collection of Mr. Charles E. Howe. 

Old Building of the Bank of Washington 122 

From a photograph obtained through the courtesy of Mr. W. F. Mattingly, 

Old Building of the Metropolitan Bank ....... 122 

From a photograph obtained through the courtesy of Mr. E. Southard Parker. 

A Banking Center, Junction of New Yoik and Pennsylvania Avenues 

and Fifteenth Street ........ facing 123 

Portrait Headpiece showing George W. Riggs and W. W. Corcoran from 

Oil Paintings 123 

Old Riggs Bank 128 



XVI Illustrations 

lAGE 

A Vii'W of !■ Street, Looking Tow-iril tlie Treasury . . facing 129 

Headpiece showing Union Trust (Company and American Security and 

Trust Company .......... 129 

One Dollar RanU-note, Bank of the Union 134 

From the coUcclion of Mr. Cluirles E. Howe. 

Natiiinal Savings Rank, 1S70 facing 135 

Headpiece showing Kntrnnces of Home Savings Bank and Union Savings 

Bank 135 

Tailpiece showing Hntiances of Washington Savings Bank and Merchants 

and Mechanics Savings Rank ........ 13S 

AUicrt Gall.itin 139 

From an Kngr,iving. 

Headpiece showing facsimile of Foreign Coins ..... 139 

()bt.iin(?ii through the courtesy of Mr. J. Selwin T.iit. 

The State, War, and Navy Building 143 

Clock in House of Representatives ........ 144 

Washington National Banks; Farmers and Mechanics, Metropolitan Citiizens, 

American, Commercial, and Traders Appendix 

Wasliington National Banks; Capital, Second, Washington, Columbia, 

Lincoln, and t^entral Appendix 

Private Banks of Washington; Bell \- Co., W. B. Hilibs & Co., Crane, 

I'ariis & Co., International, and Lewis Johnson & Co. . . Appendix 



m^ 








no^ 



OOWJMBIABANK 

i<;VH ii nRf..1ll-t <5 V 




National Finances 



(2] 





, '-^-^i' i§^ 




' "'^$s<% 




■V' ■»"''^^^i3^«i 




'•^j^ 7-^ j£H^ " <^-^^ 












yi-^0>-%^^L,.s£^ 




■ ■ - T -^■'''iS>f^'' 




■ ^J 




LU 
< 

O 

I/O 

LU 

I- 



< 



o 

u_ 

o 



3 

OQ 

->- 

ad. 
< 

LU 



^ ^ ^s^siji'/LCLaZJLa6'<tt</i!inc^a/iaJ^-^~ — ^ ^wv//»//- 

llir ASS I STANT TREAS URER , ■;■ ' ^ ** '^ ''7'^/V^y^ 



'^ ^g-^^^-k.: J^ ^^^74>r^^^^^^ 



THE PUBLIC CREDIT 



PUBLIC credit, as used in the subject assigned, 
is not synonymous with national credit. The 
Treasury Department can do little to affect 
the credit of the nation, but it can do much to con- 
serve public credit. It is not the province of admini- 
strative officers to prevent the payment of the fixed 
charges incident to the maintenance of the govern- 
ment, or to defer expenditures specially authorized 
by Congress, and they are equally pov/erless to 
increase revenues. By the exercise of proper care 
the Treasury Department can circumvent smuggling 
and undervaluations and other gross frauds against 
the revenues, but it can neither increase nor dimin- 
ish the rate of duty fixed by law, nor the internal 
revenue taxes imposed. 
s/ There is nothing known to man so sensitive as 
public credit. It is dependent upon sentiment as 
well as upon fact, and the existence of sentiment 
will produce facts sufficient to justify a sentiment 
before unwarranted. Dealing, therefore, with subtle 
undefined, and indefinable conditions, on which the 



The Public Credit 



prosperity, the contentment, and the happiness of 
eighty millions of people depend, the Treasury 
Department is confronted with a task at no time 
insignificant. 

It has been the fixed policy of the Treasury 
Department for more than half a century to antici- 
pate monetary stringencies, and so far as possible 
prevent panics. It should not be necessary to defend 
such a policy. Extraordinary measures to prevent 
the spread of epidemics are always commended, 
though this country has never witnessed a pestilence 
which has left in its wake so great an aggregate 
of suffering and sorrow as mark the presence of 
epidemics of financial disorder and industrial 
stagnature. 

Not only does private revenue, private subsist- 
ence, and private credit suffer from public distrust, 
but national revenues are also materially affected 
thereby. Should any of our great cities be forced to 
issue clearing-house certificates, whatever the cause, 
cablegrams by the hundred would countermand 
existing orders for merchandise, and customs receipts 
would reflect the calamity in thirty days. Independ- 
ent of individual suffering and disaster, the actual 
and immediate loss of one hundred million dollars 
from the government treasury would not equal the 
contraction of public revenues incident to a panic 
such as this country has witnessed several times in 
the last fifty years. 

And what can be done by the Treasury Depart- 
ment to relieve stringencies in the money market, 
and to restore normal conditions, so that whoever 
deserves credit can get credit, and none will hesi- 



The Public Credit 



tate to incur liability, lest circumstances over which 
he has no control will prevent meeting the same at 
maturity? 

It is generally conceded that our monetary 
system is non-elastic. Those who, in proof of the 
contrary, cite the ability of national banks by 
co-operation to increase circulation at pleasure, and 
to contract it at will, lose sight of the fact that when 
money is scarce and dear, it is ever unprofitable to 
maintain circulation ; and when money is plentiful 
and cheap, it is unprofitable to retire it. The slight 
element of elasticity possessed by our system as at 
present constituted works inversely to the needs of 
the public. Bank circulation does not respond to 
the varying needs of the country, and it should be 
borne in mind that national banks are under no more 
obligation to increase circulation at a loss, than are 
state banks and private corporations under obligation 
to borrow in Europe, and import gold for the com- 
mon relief. In the absence of this much needed 
automatic elasticity, the Treasury Department of 
necessity must bear the responsibility of doing all 
within the limits of its power to supply its place by 
relieving not the national banks, not the banks in 
the large financial centers, — but, by relieving the 
public, and thus, conserving public credit. Those 
who lose sight of the retlex infiuences of the money 
market, and note only its effect on bank and bank 
customers, are as ignorant of the true situation as 
those who think the banks are benefited by panics 
and resultant high rates of interest. 

Experience demonstrates that it is impossible 
for Congress to enact revenue laws that will exactly 



The Public Credit 



supply the needs of the government. There has 
been no year in our history that has not shown 
either a surplus or a deficit— though neither is desir- 
able, and both subject to wide-spread criticism. 
Had the American people produced, imported, and 
consumed during the last tlscal year per capita, as 
they did in the corresponding year of the previous 
decade, the deficit v^ould have been, not twenty- 
four millions, but ninety millions. Customs receipts 
for the first two months of the current fiscal year are 
tlfteen per cent above what they were in the corre- 
sponding months a year ago. How long these condi- 
tions will continue no man can tell, and 1 cite them 
merely to show that universal contldence, and 
universal distrust, are alike retlected in revenues. 

During periods when revenues exceed expendi- 
tures, the most natural way to relieve a temporary 
tension in the money market has been to purchase 
government bonds for the sinking fund account, or 
to make deposits in national banks. By allowing a 
surplus to accumulate in the treasury during months 
when money is undesirably plentiful and rates of 
interest undesirably, if not dangerously, low, and 
then restoring it to the channels of trade in times of 
stringency, by purchasing bonds, or making deposits, 
some slight measure of elasticity can be accom- 
plished. Care must be taken, however, that the 
deposit of public money secured by government 
bonds does not advance the price of bonds to the 
point where it is unprotltable for banks to maintain 
their circulation, for in that event national bank 
circulation will be certain to contract, and the effect 
of the deposit will be counteracted. 



The Public Credit 



Fortunately the law authorizes the acceptance 
of any security which the Secretary of the Treasury 
feels justified in taking. There is no doubt on this 
point, and instances can be cited where collateral of 
every kind has been waived and individual, personal 
guarantees accepted. The Statute reads: "Shall 
give satisfactory security, by the deposit of United 
States bonds and otherwise." Certainly it is not 
intended that deposits shall be secured by govern- 
ment bonds increased by something else. Beyond 
all legal question the provision is not cumulative, 
but alternative. The authority given is to accept 
security in government bonds, and to accept security 
"otherwise." By the judicious exercise of this dis- 
cretion, the price of government bonds can be kept 
normal, or reduced as occasion may require to a 
point that will stimulate national bank circulation. 
These deposits can then be called at seasons of the 
year when money is plentiful, lest its cheapness 
encourage unwise speculation. 

During periods when expenditures exceed re- 
ceipts, it is not so easy for the Treasury Department 
to anticipate conditions and effect an element of 
elasticity. The Treasury must be in a deplorable 
condition, however, when ten, twenty, or possibly 
thirty millions can not be spared for a month or 
more in times of acute stringency. No one would 
criticise the depletion of the government's bunkers 
to the limit of safety to relieve an acute coal famine; 
and admittedly, the loss of public credit, if long con- 
tinued, causes inevitably the loss of employment, 
and the loss of employment entails not only coal 
famines, but food famines as well. Then too there 



The Public Credit 



are always means at the command of the depart- 
ment by which circulation can be stimulated at 
appropriate times. 

There are some very good people who contend 
that the government should not meddle with the 
private tlnancial affairs of the citizen ; though the 
same people commend governmental watchfulness 
to prevent war and disease. These critics insist 
that the government must not concern itself with 
financial conditions as they effect the public, at the 
same time admitting that santitation is an appro- 
priate subject for governmental solicitude. They 
urge that the banks should be taught to rely upon 
themselves, forgetful, it would seem, that the people 
must of necessity reJy upon the banks. As well 
might they urge that springs, and wells, and supply 
streams be let alone, and authorities content them- 
selves with teaching the people the desirability of an 
abundant supply of pure water. Again, 1 say it is not 
the banks alone that are involved in this question of 
public credit, for the laborer on the street sutlers 
about as promptly, and quite as severely, from the 
effects of a panic, as the banker in his office. 

1 grant that the American banker is not always 
as conservative as one would wish. The desire for 
big dividends is altogether too potent with many 
boards of directors. The success of a bank should 
not be, — must not be, measured by dividends earned. 
Banking may not be a profession, but in ethics it 
should approach a profession rather than the avoca- 
tion of the speculator. We count the lawyer, the 
doctor, and the preacher most successful who best 
serve those who rel\- upon them. Fortunately the 



The Public Credit 



lawyer, the doctor, and the preacher who best serve 
their clients, their patients, and their parishioners are 
seldom forsaken, and their seed seldom beg bread. 
The bank that best serves the public, whose servant 
it is, may not pay the largest dividends, but in the 
swing of years it will build for itself a name; not the 
envy of the world, but the pride of those who have 
had to do with shaping its policies. So'while the 
banker must be taught self-reliance, and must be 
condemned for policies which result in public disaster, 
yet when banks through ambition, through avarice 
or through greed, tail in the discharge of the appro- 
priate functions of their great calling, the Treasury 
Department must not excuse itself and join in 
popular condemnation of those who of all should be 
the conservators of the public credit, but it must to 
the limit of the authority with which it is clothed, 
and at the risk of personal reputation, grant relief 
and prevent disaster. 




/^//-^^^ ,^^ 




^6^ — 



V. 





to 
in 

CO 



o 

< 

d 

o 

5 

a21 



a: 

< 

m 



< 

I- 



r) 




THE TREASURY DEPARTMENT AS A 
BUSINESS INSTITUTION 



IT is quite natural that in the public mind generally 
the Treasury Department is associated with 
financial transactions only, and that the Secre- 
tary of the Treasury is regarded as only the Minister 
of Finance. Very few people probably know what 
a vast amount of business is transacted by the Treas- 
ury Department having no relation to the manage- 
ment of financial affairs. Everyone knows that 
among the functions of the Treasury Department are 
the collection and disbursement of the public 
revenue, maintenance of the public credit, coining 
and printing money, bonds, stamps, etc. The organ- 
ization of the Treasury Department was mainly for 
these purposes, but from time to time, as the public 
necessities have required, new branches of the 
Government service have been established and been 
placed under the control of the Treasury Depart- 
ment. Among these may be mentioned the office 
of the Supervising Architect, known as the bureau 



12 The Treasury Department 

of Architecture, the bureaus of Navigation, Steam- 
boat hispection, Coast and Geodetic Survey, Marine 
Hospital, Revenue Cutter and Life-Saving Services, 
control of the salmon and seal fisheries, etc. With 
the organization of the Department of Commerce 
and Labor, several of these bureaus were very 
properly transferred to that Department, as the 
Treasury Department had become very greatly over- 
loaded. 

As at present constituted, but a small proportion 
of the officials and employees of the Treasury 
Department are connected with the management of 
the financial affairs of the country. The customs 
division and the internal revenue bureau assess 
and collect the public revenues in accordance with 
law. The treasurer's office, through its various 
divisions, is devoted wholly to financial matters. 
The comptroller of the currency has to do with the 
management of the national banks. 

Aside froui the bureaus and divisions named, 
the various departments have little or nothing to do 
with strictly financial matters. There are six audi- 
tors, employing large forces of clerks, who pass 
upon all vouchers submitted from the various 
departments of the Government, but have no juris- 
diction other than to allow or disallow claims pre- 
sented. The comptroller of the Treasury is tlnal 
authority when the auditors are appealed from as to 
the payment of claims, but has nothing to do with 
the policy or details of financial management. The 
appointment division keeps all records and transacts 
all the business relating to appointments, dismissals, 
promotions, transfers, leaves of absence, etc. The 



AS A Business Institution 13 

miscellaneous division is the medium between the 
bureau of internal revenue and the Secretary's office, 
and takes charge of all matters not directly per- 
taining to any special division or bureau. The 
stationery division provides stationery of every kind 
required by the Treasury Department and all its 
branches wherever located. 

The supervising architect's office, one of the 
great bureaus of the Government, has charge of 
the selection of sites for public buildings, their con- 
struction, repair, and preservation, and also assigns 
space in them to the various officials. This office 
employs a very large force, including many experts 
for technical work, and expends many millions of 
dollars annually. The office of the chief clerk and 
superintendent is one of the most important in the 
Department. The extent of its work is enormous 
and infinite in its detail. It has the custody of all 
public buildings ; designs, supplies, and keeps in 
repair, the furniture for them ; and furnishes them 
with heat, light, water and supplies of all kinds; 
appoints the custodian forces, employing an army of 
men, such as engineers, firemen, elevator con- 
ductors, janitors, and laborers. 

The public health and marine hospital service 
IS under the Treasury and its operations extend not 
only throughout this cojuntry, but it has official 
stations in nearly all the important ports of the 
world. It cares for sick and indigent seamen, and 
also maintains a strict quarantine service and guards 
the public against all epidemic diseases. 

The revenue cutter service, employing forty 
vessels, is engaged in preventing smuggling, in 



14 The Treasury Department 

protecting the seal and salmon fisheries, carrying 
officials and supplies where needed away from lines 
of transportation ; assisting vessels in distress, and 
performing various other duties. 

The life-saving service, with stations all along 
our most dangerous coasts on sea and around the 
inland lakes, annually saves millions of dollars and 
many lives with its well drilled army ot heroic men. 

It will thus be seen that the Treasury Depart- 
ment is not devoted mainly to the management of 
the public finances, but, in addition to this most 
important work, is a great "business" institution, 
co-operating with the other executive departments 
in managing the vast concerns of Government. 

H. A. TAYLOR. 





o 



o 



I/O 

< 
u 



< 

o 



< 

UJ 

a 

I/O 

< 



O 

H 




r^'X'^'j::i:AU\4ix:'X:.*'f.-i^-L'X:^'^''x::'^'^'M)'^^^^^^^^ 



GOVERNMENT RECEIPTS AND 
DISBURSEMENTS 



MORE than usual interest attaches just now to 
the comparative receipts and disbursements 
of the National Government, because of the 
somewhat marked change in conditions that has 
taken place in the past two years. The Government 
fiscal years from iqoo to 1903 inclusive, were years 
of large surplus. In round numbers the surplus for 
the year ending June 30, 1900, was $80,000,000. It 
was about the same in 1901, increased to $90,000,000 
in 1902, and in mo} dropped to $55,000,000. In 
1904 the full effect of the repeal of the war taxes was 
felt, and there was also a sharp decline in customs 
receipts, so that the ordinary receipts of the Govern- 
ment exceeded its ordinary disbursements by only 
nine million dollars. During that year, however, 
the Government paid $50,000,000 for the right of 
way of the Panama Canal, and if this item is included 
the year of 1904 shows a deficit of more than 
840,000,000. In 1905, with no extraordinary pay- 



16 Government Receipts and Disburse ments 

ment of this character, the deficit was 124,000,000. 
While the most important factor bringing about this 
changed situation was the repeal of the internal 
revenue taxes imposed at the time of the war with 
Spain, numerous other factors have also entered into 
the case, and to understand what these have been 
we must examine the Government's sources of 
revenue as well as the character and extent of its 
expenditures. 

In the daily statement issued by the Treasury 
Department on the last day of the last fiscal year 
the total receipts of the Government were given in 
round numbers at $540,000,000. This sum does not 
include the postal receipts, as the postal revenues 
remain in charge of the Postmaster-General and are 
applied directly to the payment of postal expendi- 
tures. Exclusive of postal revenues, therefore, the 
Government income in 1905 was derived from the 
following sources: from customs, in round numbers, 
$260,000,000; from internal revenue, $230,000,000, 
and from miscellaneous sources, $50,000,000. Of 
these three classes of revenue the customs revenue is 
subject to much the greatest fluctuations. Changes 
in business conditions are reflected almost at once in 
the customs receipts. In forecasting the condition 
of the Treasury in his annual reports to Congress, 
the Secretary of the Treasury finds it more difficult 
to forecast the customs receipts than to determine 
with reasonable accuracy the other items of the 
Government's receipts and expenditures. Thus, in 
1902, the customs receipts were $254,000,000; in 
1903 they showed an increase of $30,000,000, rising 
to $284,000,000; in 1904 they dropped $23,000,000 



Government Receipts and Disbursements 17 

to $261,000,000; and in 1905 they showed no change 
from the previous year. For the first two months 
of the current fiscal year customs receipts have 
increased very rapidly and are now $7,000,000 
greater than the receipts for the corresponding 
period a year ago. An interesting feature of customs 
receipts is the fact that their collection is concen- 
trated. Of $260,000,000 customs receipts last year, 
two-thirds was collected at the port of New York. 
There are 123 customs districts, but 90 per cent of 
the customs revenue is collected in six districts. 

For obvious reasons the internal revenue receipts 
show much less fluctuation than the receipts from 
customs. Thus for the three years 1903, 1904, and 
1 90s, since the repeal of the Spanish war taxes, 
internal revenue receipts have remained practically 
unchanged at §230,000,000 a year, and for that 
portion of the present fiscal year which has already 
expired, the increase over last year is small. 

Among the principal items of the miscellaneous 
receipts of the Government are receipts from the 
sale of public lands, from profits on coinage, from 
the tax on bank circulation, and from the taxes and 
licenses in the District of Columbia. 

The receipts from the sale of public lands fluct- 
uate largely, but average about six millions dollars a 
year. Congress has set apart this portion of the 
national income for the reclamation of arid lands by 
irrigation. 

For twenty-flve years past the profits on coin- 
age have constituted quite an important item in the 
public revenue. As late as 1903 the seigniorage 
amounted to $8,000,000 a year, but for the current 

[3] 



18 Government Receipts and Disbursements 

fiscal year it will hardly exceed one-quarter of that 
amount. Last year the profit on the coinage of pen- 
nies and nickels alone was about a million and a half 
dollars. 

The daily statement of the Treasury classifies 
the Government expenditures under seven headings, 
namely, civil and miscellaneous, war, navy, Indians, 
pensions, public works, and interest. Of these, pub- 
lic works is new, never having been used until the 
present fiscal year. It includes expenditures on 
rivers and harbors, irrigation, on public buildings 
not military in character, and on the Panama Canal. 
One other item of public expenditure might perhaps 
be given separately in the Treasury statement to 
advantage. When the postal receipts fall to equal 
the postal expenditures, funds are taken from the 
general Treasury, and advanced to the Post Office 
Department to meet the postal deficit. During the 
last fiscal year $15,000,000 was advanced to the 
Post Office Department in this way, and probably a 
greater sum will be advanced during the current 
fiscal year. This item is now included under the 
heading "civil and miscellaneous," but it might well 
be given in the daily Treasury statements under a 
separate head. The expenditures of the Government 
for interest, pensions and Indians change from year 
to year within comparatively narrow limits. The 
large changes in recent years have been in the two 
items, "civil and miscellaneous" and "navy." In 
1903 the naval expenditures were $83,000,000; in 
1904, $103,000,000, and in 1905, $1 17,000,000. The 
civil and miscellaneous expenditures have also 
shown rapid increase, due not only to the increasing 



Government Receipts and Disbursements 19 

population of the country but even more to the 
extending scope of the Government's activity. 
Thus, the extension of free delivery of mail matter 
to rural communities, the construction of the Panama 
Canal, the reclamation of arid lands by costly irri- 
gation projects, a large increase in the number 
of public buildings under construction and the 
constantly extending held of the work of the Depart- 
ment of Agriculture have been and are potent intlu- 
ences in swelling the volume of the public expendi- 
tures. It might fairly be expected that the increasing 
scale of public expenditure, due to the growth of 
the country, would be met by an increase in public 
revenues from the same cause, but the increase in 
disbursements, due to the entry upon new fields of 
activity, can in the end only be met from new 
sources of revenue. 

CHARLES HALLAM KEEP. 




>- 

U 

oc 
O 

>- 



o 

X 



O 

U 



< 

1/1 




THE CUSTOMS REVENUES 



^ 



WITH the theorist and the student who claim 
that a tariff is baneful and the system of 
protection an enemy of civilization the 
Treasury Department does not contest with their 
own weapons, for tine-spun argument and specious 
reasoning, have no place in its arsenal. It is condi- 
tion, not theory, that confronts the Department as 
it glances at its books of record. And it propounds 
the pertinent query, based on solid financial fact, of 
what today would be the situation of the country 
"^ had the ten billions of customs dollars never been 
collected for the benefit of Uncle Sam. To be 
precise and statistical: beginning in 178Q and con- 
tinuing to the time the custom houses closed on 
June 30, 1905, the customs receipts of the United 
States have been just $9,641,898,970.63. 

There is nothing that shows the growth of our 
country better than our customs revenues. While 
ocean commerce was passing from the small sailing 
vessel to the mighty ocean-liner, our population 



22 The Customs Revenues 

increasing from tiiree millions to eighty-three, our 
travel facilities changing from horseback and coach 
to sixteen billions of railroad property, the customs 
revenues more than kept pace with this progress 
quickstep. 

It is now possible to collect on an average as 
much money from customs every four days as in a 
whole year in the days of 1790; over twice as 
much in a day as then in a month. In the fiscal 
year just closed there went into the Treasury coffers 
two hundred and sixty-two millions of customs 
dollars. 

From the port of New York comes the bulk of 
this revenue. The merchandise landed on its 
wharves pays two-thirds of the customs duties col- 
lected by the Government, twice as much as is 
taken from all the other ports of the country com- 
bined, and yielding an annual revenue of nearly 
$180,000,000. Boston comes second and Philadel- 
phia third, the former some distance over and the 
latter just under the twenty million mark. Then 
follow Chicago, San Francisco, and New Orleans, in 
order and in close rivalry, and next, Baltimore. 
Saint Louis is eighth, and Tampa and Detroit end 
the list of the ten ports at which at least a million 
dollars is collected each year. There are nineteen 
ports at which the annual revenue is between 
$300,000 and $1,000,000, headed by Cleveland ; and 
fifteen, led by Newport, Vermont, where the reve- 
nue exceeds $100,000. And besides, from out in 
the Pacific, Hawaii sends more than $1,000,000 
each year to help pay the expenses of her new 
governmental parent. 



The Customs Revenues 23 

Into the Treasury the customs receipts come 
from one hundred and fifty-seven different ports 
which Congress in its wisdom has established, 
scattered far and wide from the upper corner of 
Alaska in the north to the lower end of Florida in 
the south, from Honolulu in the west to the: 
Canadian boundary of Maine in the east. Two 
states have joint ownership over the lead in number 
of ports within their borders, New York and Maine, 
each with fourteen to her credit, while Massachusetts 
with her twelve is second and far ahead of her 
nearest rival. 

Of all these ports there are forty-six that are 
not self-supporting, where there is relatively large 
expenditure and almost infinitesimal revenue, where 
it costs more than a dollar to collect a dollar, which 
unbusinesslike condition the Treasury Department is 
powerless to remedy until Congress gives authority 
to undo what it itself has done. 
V The worst example of this in the last complete 
year of record is the port of Beaufort, North Carolina, 
at which two persons were employed at an expense 
of fifteen hundred dollars for the year— who collected 
the sum of $1.55 in revenue— making it cost $973-72 
to collect one dollar. And Crisfield, Maryland, in 
the same time collected $22.70 at an expense of 
$2,700. 

^ On the other hand, at New York, where seven 
thousand and more ships enter each year and an 
army of 2,700 persons are employed to do the 
necessary customs work, just two cents of each 
dollar collected goes for expense and the other 
ninety-eight to the profit of the government. In all 



24 



The Customs Revenues 



Tile country over, small ports and large, accessible 
and isolated, busy and inactive, it costs the Govern- 
ment a little over three cents to collect each dollar 
of customs revenue. 

Great as has been the increase in the customs 
revenues, the march has not yet stopped. The new 
hscal year is nov/ but two months old, yet in that 
time there has come into the Treasury six millions 
of dollars more than in the same months of the year 
that preceded, and a continuation of the rush of 
duty-paying imports with which the year begins 
means a new record in the customs revenues of the 
land. 

JAMES B. REYNOLDS. 




'+ 




THE INTERNAL REVENUES 



w 



lay along 
was the 
country 



HAT a bank-bill was at Philadelphia, or a 
shilling-piece at Lancaster, that was 
whiskey in the towns and villages that 
the bank of the Monongahela river. It 
money, the circulating medium of the 
A gallon of good rye whiskey, at every 
store a\ Pittsburg, and at every farmhouse in the four 
counties of Washington, Westmoreland, Alleghany, 
and Fayette was the equivalent of a shilling-piece." 
This, says the historian McMaster, was the 
status in Western Pennsylvania when the first excise 
or internal revenue tax law was enacted by Congress 
in 1791. Alexander Hamilton, then Secretary of 
the Treasury, probably drafted the bill, certainly 
approved and urged its passage. 

This new law levied a tax on distilled spirits 
ranging from 7 to 18 cents a gallon, according to 
strength. To the distillers of Pennsylvania it was 
a crushing blow. The noted "Whiskey insurrec- 
tion" followed. Revenue officials were tarred and 
feathered, beaten, driven away, and almost mur- 
dered. Malcontents and rioters defied the law. 



26 The Internal Revenues 

President Washington issued warning proclamations 
to these defiant law breakers of the Keystone State, 
and fmally in 1794 he called into the tield fifteen 
thousand troops, largely veterans of the Revolution. 
They marched to meet the insurgents. Show of 
federal force was sufficient. Surrender was prompt. 
The insurrection collapsed and its suppression was 
virtually bloodless. 

The first internal revenue legislation was basis 
for the first arm.ed resistance to the power of the 
federal government and the due and full execution 
of its laws. Unfortunately, physical and armed 
resistance to the enforcement of the same laws has 
constantly marked the history of the internal revenue 
system and sometimes the illicit distiller or " moon- 
shiner" of today, as did his ancestor, resists to the 
death the attempt of revenue officials to enforce 
federal legislation. 

Albert Gallatin was in sympathy with the 
insurgents, intense in his antagonism to the levying 
and collecting of the taxes of lyqi. in 1802 he was 
Secretary of the Treasury and largely through his 
influence all internal revenue laws were abolished 
and customs dues furnished the national treasury 
with funds necessary to the support of the govern- 
ment. 

Debt incurred during the War of the Revolution 
caused the passage of these first statutes. Years of 
peace followed and all were repealed, but the second 
war with Great Britain forced their re-enactment in 
1813. in 1817 they were once more abolished and 
there was no such tax imposed again until the enor- 
mous expenses of the Civil War demanded a prompt 



The Internal Revenues 27 

and certain system for filling the money chest of the 
Government. 

In 1862 a most orderly, complete, and wide- 
reaching internal revenue taxing scheme was devised 
and adopted. The need was great and American 
statesmanship, genius, and patriotism were equal to 
the demands of the hour. To Governor, afterward 
Chief Justice, Chase, then Secretary of the Treas- 
ury, and John Sherman, also afterward Secretary of 
the Treasury, then Senator, is due largely the credit 
for the passage of the Act. Again two notable 
financiers appear in connection with the history of 
these laws. 

George S. Boutwell of Massachusetts, was 
appointed by Mr. Lincoln Commissioner of Internal 
Revenue under the law of 1862 and on him fell the 
heavy burden of organizing the bureau and enforc- 
ing laws which involved almost every conceivable 
V object of taxation, from a street-car ticket and a box 
of matches to a ton of coal and a railway locomo- 
tive. Under this law, as under previous internal 
revenue legislation, distilled spirits, beer and tobacco 
bore the heaviest part of the burden. 

In the peaceful days of the seventies, eighties, 
and the early nineties these laws were largely modi- 
fied as to the number of objects taxed and the rate 
of tax, so that the total receipts a year dropped 
from three hundred millions to a little over one hun- 
dred millions. 

In 1898 war was again declared and immediately 
Congress by its enactments laid upon the Internal 
Revenue Bureau the burden of gathering in the 
increased national income. One hundred millions 



28 The Internal Revenues 

additional a year were needed. New objects of 
taxation were found, previous rates on old objects 
increased. The annual internal revenue collections 
grew from $146,000,000 in 1897 to $295,000,000 in 
1900, and $306,000,000 in 1901. 

The war with Spain ended and Congress 
repealed the war legislation of 1898, and today 
on a peace basis, the Internal Revenue Bureau is 
collecting over $230,000,000 a year, being fully forty 
per cent, of the entire revenues of the government. 

Of the moneys collected as a result of the war 
with Spain enactments, the banks and bankers of 
this nation contributed $14,000,000. 

Under the internal revenue laws in force from 
1791 to 1802 $6,500,000 were collected ; under those 
laws in effect from 1812 to 1817, $i5,soo,ooo; and 
from i8d2 to June 30, 1905, slightly over seven 
billions of dollars. 

Virtually all revenue taxes are paid through the 
sale by the government to the taxpayer of stamps 
which are affixed to the objects of taxation. These 
taxes are levied according to weight and volume, 
and not as a rule by value. The system may not 
be philosophic, but it is practical. 

The total internal revenues for the fiscal year 
closed June 30, 190s, were slightly in excess of 
$234,000,000. Of this sum the tax on distilled 
spirits (whiskey, alcohol, and brandy, $1.10 a proof 
gallon) produced nearly $129,000,000; the tax on 
beer ($1 a barrel of 31 gallons), $49,500,000, and 
the tax on manufactured tobacco, snuff, cigars, and 
cigarettes, $45,000,000. 

The total force engaged in this work aggregates 



The Internal Revenues 29 

some four thousand persons and the average expense 
of the bureau is $4,soo,ooo. Its work covers all the 
territory of the United States except the Philippine 
Islands and Porto Rico. The leading States in the 
payment of internal revenues and in their proper 
order are Illinois, New York, Indiana, Kentucky, 
Ohio, and Pennsylvania. The lowest collection 
district in point of receipts is Hawaii, where the 
annual collections are $45,000. 

Historically, internal revenue legislation is con- 
nected with war, war times, and war inheritances, 
yet it is safe to predict that this system, so responsive 
to public need, so readily invoked, and affecting but 
little our trade relations with other nations, is a 
permanent part of our fmancial system and will be a 
part of that system until the United States become 
only history. 

JOHN WATSON YERKES. 





1- 
< 

t- 

Q 



T. 



O 

v: 
z: 
< 




^UIMMALJU 



ULMALALALi 



Tjzrnjjuu 



THE NATIONAL BANKING SYSTEM 
AND ITS SUPERVISION 



THE supervision of national banks by the comp- 
troller of the currency, while entailing great 
and frequently grave responsibilities from the 
beginning, has grown more onerous year by year, 
with the development of the system, the constantly 
increasing number of banks, and the amplitude of 
their undertakings. 

During forty-three years of existence of the 
national banking system, the currency bureau has 
been presided over by eleven comptrollers. It was 
organized by Hugh McCulloch, an able financier 
and experienced banker, who was appointed comp- 
troller. May 9, 1863, and continued as the executive 
head of the bureau until March 8, 186% when his 
recognized ability secured for him advancement to 
the more exalted position of Secretary of the 
Treasury. At the close of Comptroller McCulloch's 
administration there were, in active operation, 907 
national banks. 



32 The National Banking System 

The second Comptroller of the Currency was 
Freeman Clark, who held office from March 21, 
186s, to July 24. 1866. Under his administration the 
nimiber of national associations increased to 1,654, 
or 80 per cent. 

H. R. Hulburd succeeded Mr. Clark, February 
I, 1867, and served until April 3, 1S71, during which 
period the number of active associations increased 
to 1,907, or It) per cent. 

Next in line of succession was John J. Knox, 
appointed April 25, 1872, who enjo>ed the distinct- 
ion of having served as head of the bureau longer 
than any of his predecessors or successors. He 
retired April 30, 1884, after twelve years' service. 
The number of banks at the close of Mr. Knox's 
administration had increased to 2,600, or 36 per cent. 

Henry W. Cannon succeeded Mr. Knox, May 
12, 1884, and served until March i, 188b. The 
active banks at the close of his term numbered 
2,768, an increase of 6 per cent. 

William L. Trenholm was next appointed comp- 
troller, April 20, 188b, and served until April ^o, 
1888, on which latter date the banks in active opera- 
tion numbered 3,200, an increase of 15 per cent. 

Edward S. Lacey was appointed to succeed Mr. 
Trenholm, May i, i88q, serving until June 30, iSq2. 
The number of banks increased during his adminis- 
tration to 3.759, or 17 per cent. 

A. B. Hepburn succeeded Mr. Lacey, August 2, 
1892, and resigned April 25, 180;. During the brief 
period of his incumbency the number of banks 
increased to 3,830, or 1.8 per cent. 

James H. Eckels was next appointed comptroller, 



AND ITS Supervision 33 

April 26, 1893, and continued in office until Decem- 
ber 31, 1897. During the five years of his incum- 
bency, there were 143 failures of national banks, 
practically one-third of the total number occurring 
in the forty-three years of existence of the system, 
due to the panic of 1893. At the beginning of his 
administration there were 3,830 active associations, 
and at its close this number had been reduced to 
3,607, a decrease of nearly 6 per cent. 

Upon the retirement of Mr. Eckels, Charles G. 
Dawes was appointed comptroller, January i, 1898, 
and served until September 30, 1901. During his 
administration the number of national banks 
increased to 4,221, or 17 per cent. This large 
increase was due principally to the Act of March 14, 
1900, which authorized the organization of banks 
with a minimum capital of $25,000. Mr. Dawes 
was succeeded by the present comptroller. 

Thus it will be seen that with each succeeding 
comptroller, excepting Mr. Eckels, there has been a 
steady increase in the number of banks, and a corres- 
ponding increase in the responsibility of official 
supervision. 

The increase in the number of banks, however, 
is not by any means the principal factor to be con- 
sidered in measuring the constantly augmenting de- 
gree of responsibility involved in official supervision. 

Originally, national banks were intended to be 
simply banks of discount and deposit, and a medium 
for the issuing of circulation based upon a deposit of 
Government bonds. The law enumerates their 
corporate powers to be: to discount and negotiate 



[4] 



34 The National Banking System 

promissory notes, drafts, bills of exchange and other 
evidences of debt; to receive deposits; to buy and 
sell exchange, coin and bullion; to loan money on 
personal security; and to perform such other inci- 
dental powers as are necessary to carry on the busi- 
ness of banking. 

The present is an age of consolidation, expansion 
and great fmancial undertakings. Banks are imbued 
with the spirit of the times, and the tendency to 
depart from the well defined limitations of powers 
conferred by the bank act makes official supervision 
vastly more difficult and entails responsibilities upon 
the supervising officer far more onerous than those 
resulting from a mere increase in the number of 
associations. 

Active competition, superinduced by the con- 
stantly increasing number of banks and trust com- 
panies, has wrought a gradual and marked change 
in the methods employed in the conduct of banking 
at the present time, as compared with the earlier 
years of the system, and many banks now undertake 
operations not contemplated by the national bank 
act as coming within their enumerated or inciden- 
tal powers, producing conditions which require 
more watchful care and the exercise of greater 
discretion on the part of those vested with super- 
visory powers. 

The total number of national banks organized 
from 1803 to September i, 1905, is 7,895, of which 
5,807 are in active operation, 1,652 have closed by 
voluntary liquidation, and 436, (or 5)4 per cent) have 
failed and been placed in charge of receivers. 



AND ITS Supervision 35 

In the statement of condition on May 29th, 
1905, these active banks show the following : 

Capital stock, $791,567,231.32; surplus, $4n,- 
436,145.71; undivided profits, $201,855,091.02; 
total capital, surplus and undivided profits, $1,406,- 
858,956,468.05. Individual deposits, $3,783,658,- 
494.42; United States deposits, $65,570,520.69; 
United States disbursing officers deposits, $9,727,- 
823.57; total deposits, $3,858,956,838.68. Loans 
and discounts, $3,899,170,328.32. Total resources, 
$7,327,805,874.68. 

Of the insolvent banks, the affairs of 354 have 
been fully settled. Claims have been proved 
against these banks to the sum of about $105,000,- 
000. Of these claims, 78. 1 1 per cent have been 
paid in cash or by offsets. The total loss to creditors 
of all the national banks in forty-two years on their 
deposits, now amounting to more than three and 
one-half billion dollars, has been less than thirty 
millions dollars. The cost of liquidation of all the 
failed national banks has been a little over eight per 
cent of the amount collected by the receiverships. 
The percentage of the failures among national banks 
has been five and one-half per cent; among the 
banks other than national, about seventeen and one- 
half per cent. The failed national banks have paid 
their creditors more than seventy-eight per cent, 
while the banks other than national have only paid 
about forty-five per cent. 

Whether this very creditable record of the 
operations of "The National Banking System and 
its Supervision," is due to conservatism and good 



36 



The National Banking System 



jiidiiment on the part of bank management in general, 
or to the effectiveness of the official supervision in 
particular, or both, awarding to each its just propor- 
tion of credit, the result, on the whole, is very 
gratifying. 

WILLIAM BARRET RIDGLEY. 








to 

UJ 

I- 
< 



Q 

Z 
Z 



< 

3 



O 




THE MINT SERVICE 



THE mint service of the United States includes 
four coinatre mints, located in Philadelphia, 
San Francisco, Denver, and New Orleans, 
and eight assay offices, located in New York, Char- 
lotte, North Carolina, St. Louis, Deadwood, Helena, 
Boise, Carson, and Seattle. The assay offices receive 
gold bullion and pay coinage value for it, less a local 
charge of one-eighth of one per cent for the service of 
the office. The bullion is paid for by drafts on the 
Treasury, becomes the property of the government, 
and is shipped at its expense to the mints for coinage. 

The original mint is the one in Philadelphia 
established there when that city was the seat of 
government. In 1901 a new building was com- 
pleted for it at a cost of $2,025,000, and it is today 
the largest, finest, and most thoroughly equipped 
mint in the world. 

The mint in San Francisco was established by 
act of Congress dated July 3, 1852, and ranks second 
in capacity and volume of output. To December 



38 The Mint Service 

31,1 904, the gold coinage of the San Francisco Mint 
aggregated $1,394,877,907 and the gold coinage of 
the Philadelphia Mint $1,152,322,352. The gold 
deposited in the San Francisco mint comes principally 
from the mines of the Pacific Coast States, Nevada, 
Alaska, and the Canadian Northwest, Mexico, and 
Australia. The receipts from Australia have been 
heavy of late years, a f:ivorite method of remittance 
from that country to London being by gold ship- 
ments to San Francisco, thence by United States 
Treasury transfer to New York, where the credit is 
converted into exchange on London or Paris, or gold 
is taken for shipment across the Atlantic. 

The United States Mint in Denver succeeded to 
a private coinage establishment conducted by Clark, 
Gruber & Co., a firm of Denver bankers. They 
made gold coins following the first discovery of gold 
in Colorado, and their coins bore a good reputation. 
The United States bought their coinage equipment 
in 1863 and conducted the establishment as an assay 
office until 1905, shipping the bullion purchases to 
the Philadelphia Mint. A beautiful new mint edifice 
has been constructed in Denver at a cost of about 
one million dollars, machinery is now being placed 
in it, and coinage operations will begin there this 
autumn. The Denver Mint will probably receive 
nearly all of the gold produced in the Rocky 
Mountain region. 

The mint in New Orleans was organized in 1818 
by an act of Congress which also provided for mints 
in Dahlonega, Georgia, and Charlotte, North 
Carolina. The establishment of the latter two was 
due to the discovery of gold in the Appalachian 



The Mint Service ^ 39 

range, the first gold discovery in the United States. 
These three mints were closed by the Civil War. 
The Nev/ Orleans Mint was reopened in 1879, the 
Charlotte institution was reopened as an assay office, 
and the old mint property in Dahlonega was voted 
to the State for an Agricultural College. The mint 
in New Orleans is the smallest of the present mints 
in capacity; and is occupied chiefly in the coinage 
of subsidiary silver for the territory tributary to New 
Orleans. 

The New York Assay Office is a very important 
institution. It is located in Wall street, adjoining 
its twin institution, the sub-treasury. The im- 
ports and exports of refined gold bars and gold coin, 
the medium of final settlement between the United 
States and Europe pass through this institution. 
Like the coinage mints it has a refinery. 

The most important assay office of the service, 
after the New York office, is that in Seattle, Wash- 
ington. It was established in 1898 to receive the 
gold from Alaska and the Klondike, and most of the 
product of that northwest region has found its way 
to this institution. Its receipts to July 1, 1905, prac- 
tically all from territory new seven years ago, have 
been: gold, $100,071,912.36; silver, $1,325,455.71; 
total, $101,397,368.07. 

The coinage of the United States exceeds in 
value and in number of pieces that of any other 
country in the world. 

During the calendar year 1904 the coinage 
of the United States was as follows: gold, $233, 
402,428; silver, $15,695,609.95; copper and nickel, 
$1,683,259.35. The profits accruing on one and five 



40 



The Mint Service 



cent pieces aggregated $1,320,661.55. The total of 
the foregoing figures for new coin made last year, 
$250,781,567.30, doubtless exceeds any coinage 
record for one year ever made before by any country 
in the world. 

The mint service is organized under a bureau of 
the Treasury Department, with headquarters in the 
Treasury building. Besides the ordinary minting 
operations, the service supplies fme gold and silver 
bars for the use of manufacturing jewelers, manu- 
facturers of dental supplies, and for other industrial 
purposes. It sold in 1904 for these uses $22,278,204 
of gold, and $2,917,386 fine ounces of silver. 

GEORGE E. ROBERTS. 





z: 
o 

o 



< 



o 

z: 



a; 

□_ 



O 

> 

< 

a; 
O 



O 
< 

LU 




THE MAKING OF 
SECURITIES AND CURRENCY 

THE making of the printed securities and 
currency of the United States is a matter of 
interest to those engaged in handling them 
in large quantities. According to law their prepara- 
tion and issue is under direction of the Secretary of 
the Treasury, and during the last twenty-seven years 
they have been prepared and completed exclusively 
in the printing bureau of the Treasury Department. 
When it is determined to issue a new form of 
security or currency, the subject of the general 
design is discussed by the oftlcials interested, and 
the conclusion is embodied by a trained designer in 
a model which is submitted for criticism to the 
same officials, and when satisfactory to the Secre- 
tary is approved by him as a basis for engraving. 
T!he design must necessarily be conventional in cer- 
tain respects, to admit of conspicuous placement of 
the title, and the wording of the legend, and the 
numeral counters which must be so located that the 



42 The Making of 

currency may be readily distinguished and rapidly 
counted in large amounts. Then, there is the usual 
vignette, different for each denomination, to give to 
it individuality and obstruct counterfeiting. 

The approved design is placed in the hands of 
selected engravers to work out their respective 
specialties of engraving, and when completed the 
separate engravings on thin flat steel are assembled 
and transferred to another piece of steel of sufficient 
size to contain the entire model, thus producing one 
engraving of the whole design, or a completed plate 
for printing one-subject securities. Currency being 
of smaller dimensions the whole design is retrans- 
ferred and repeated on another and larger piece of 
steel making a completed plate to print several notes 
at one impression. The same process of transferring 
is applied alike to face, back, and tint plates, for 
printing different colors. Transferring makes every 
completed note a facsimileof every other note of the 
same issue and denomination, hence a counterfeit 
may be detected by comparison with any genuine 
impression of its kind. By transferring, which is 
performed with a steel roll under great pressure to 
take up in relief tiie sunken lines of engraving and by 
pressure reproduce them on a plate for printing, the 
original engraving or its assembled parts may be 
available to restore worn plates or make new ones. 

The distinctive paper used is held in the custody 
of another representative of the Secretary of the 
Treasury. It is manufactured for its single purpose 
and is an added obstacle to the counterfeiter. Its 
distinctive feature is a double line of colored silk 
fiber so located on the sheets to be conspicuous on 



Securities and Currency 43 

both ends of the back of each printed note. When 
drawn for use, the paper is passed through the 
wetting processes to prepare it for printing. 

The plate and paper delivered to the printer, 
the printing is begun. Attached to each printing 
press is an automatic device that records every 
impression printed. The printed sheets are sent to 
the examiners, and after examination all the imper- 
fect sheets are eliminated and separately accounted 
for. After the face printing the sheets are put under 
hydraulic pressure, of five thousand pounds to the 
square inch, and the pressure, with the sizing to 
which the currency has in the meanwhile been 
subjected, gives smoothness to the sheets and crisp- 
ness and durability to the notes. 

The subjects on the sheets are then numbered 
by specially devised machines. The system of 
numbering the securities and currency, in connection 
with the characters affixed to the numbers, and the 
special quality of the inks used, add to the difficulty 
of counterfeiting, and aid in the detection of coun- 
terfeit currency. 

The bonds and national bank notes in sheets, 
are sealed in the printing bureau by surface printing. 
The former are delivered to the Secretary of the 
Treasury, and the latter to the Comptroller of the 
Currency. The United States notes and certificates 
in sheets, are delivered to the Treasurer of the 
United States under whose supervision they are 
sealed and separated, imperfect sheets being can- 
ceiled and macerated. 

The safe-keeping in the course of manufacture 
of the perfect and imperfect securities and currency, 



44 The Making of Securities and Currency 

from the time of cutting the first line of engraving 
and the receipt of the first sheets of paper, is assured 
by such as efficient and practicable system of counts, 
checks, and guards, and method of accounting, as 
can be conceived possible to employ in handling 
engravings and sheets of great aggregate value. 

Periodically there is an official rigid examination 
and count of the balances of sheets of securities and 
currency in the bureau by a committee under direc- 
tion of the Secretary of the Treasury, which invari- 
ably concludes with satisfactory result. 

WM. M. MEREDITH. 





h- 



< 

□_ 

LU 

Q 
>- 

in 
< 

LU 



O 

I/O 
LU 
1/0 
I/O 

LU 

U 

O 

ac 

Q_ 

o 

> 

< 

o 



o 



X 




LOANS AND CURRENCY 



JAY COOKE, the Philadelphia banker, and most 
prominent of those who financed the Govern- 
ment of the United States through the miseries 
of the Civil War, is credited with the declaration that 
"A National debt is a National blessing." Those of 
us who accept this view will agree that our country 
was the most blessed of nations at the close of that 
war, for it owed the huge sum of $2,865,000,000. 
But great as was this indebtedness it was probably 
not so heavy a burden as that assumed by the 
young republic when it began its existence in 1789, 
the debt being then nearly $75,000,000 without a 
dollar to meet it or to meet the current expenses of 
the Government. In fact, Alexander Hamilton, the 
first Secretary of the Treasury, borrowed money 
from the Bank of North America in Philadelphia and 
the Bank of New York on his own responsibility, 
to the amount of nearly $200,000. The alternate 
decrease and increase in the debt from 1789 down to 
the present may be traced in the annual report of the 



46 Loans and Currency 

Secretary. It will be found that on January i, 1835, 
we owed but $33,733. 3S, though on that day there 
was more than nine millions of dollars of cash in the 
Treasury. The United States has never been, tech- 
nically speaking, free from debt, for there have 
always been unpaid obligations outstanding ; but, as 
in the above instance, it has at times had money 
enough to pay off everything if it could only get its 
creditors to ask for the cash. 

During the Civil War the Government resorted 
to various expedients to obtain money. It borrowed 
from the banks, opened popular subscriptions to 
short term and long term obligations, effected tem- 
porary loans for both small and large amounts, gave 
six per cent certificates of indebtedness to contrac- 
tors willing to accept them in liquidation of their 
accounts and even borrowed several hundred mil- 
lions without asking the consent of the lenders. It 
was through this last named genial proceeding that 
the United States notes, otherwise known as green- 
backs and legal tenders, found their way into use. 
There were about four hundred fifty millions of 
them and there are still three hundred forty-six 
millions outstanding. 

All of the obligations issued during the Civil 
War were negotiated by the Government with its 
own people in the United States. At first they 
were issued for gold, but after the suspension of 
specie payments, about January 1, 1862, the Govern- 
ment accepted United States notes, generally at par. 
There were several hundred millions of United 
States bonds (five-twenties, sixes of '81, and ten- 
forties) sold to go abroad, but the negotiations for 



Loans and Currency 47 

their sale were conducted by financial houses for 
their own account, and not by or for the Govern- 
ment of the United States. 

As soon as the war was over the Government 
set about the purchase of its short term obligations, 
or their consolidation into bonds of longer terms, 
chiefly five-twenties. Then it sold its surplus gold 
from time to time and devoted the proceeds to the 
purchase of bonds. When the sales of gold and 
purchase of bonds began, gold was worth about 140, 
and the first bonds purchased were worth about 1 16, 
both prices in currency. The gold value of the 
bonds first purchased was about 82^. 

Under the influence of these operations the 
price of gold declined while that of the bonds was 
maintained, so that their approach to par value in 
gold soon justified an attempt by the Government to 
refund them at lower rates of interest. Accordingly 
the refunding Acts of 1870 and 1871 were passed 
under which some fifteen hundred millions of five- 
twenty and ten-forty bonds were refunded at five, 
four and a half, and four per cent. The refunding 
began in 1871 and ended in 1879. 

Further operations along the same lines refunded 
other portions of the debt while simultaneously pur- 
chases and redemptions were continued, so that by 
January 1, 1894, the debt had been reduced from the 
twenty-eight hundred and odd millions in 1865 to 
about five hundred and eighty-five millions. At this 
time financial troubles that have been accounted for 
in various ways put a stop to the reduction of our 
debt and in the ensuing twenty-eight months it was 
increased by the sale of two hundred and sixty-two 



48 Loans and Currency 

millions of bonds, for gold, to replenish the gold 
reserve held for the redemption of United States 
notes. 

In i8qS a further sale of bonds, in the amount of 
about two hundred millions, was made on account 
of the war with Spain, and in 1900 and subsequent 
years refunding under the Act of 1900 added a new 
loan of five hundred forty-two millions, at two per 
cent, which was issued in redemption of a like 
amount of bonds of older loans bearing higher rates 
of interest. 

The United States bonds issued before and dur- 
ing the Civil War contained in their text no state- 
ment of the kind of money in which they would be 
redeemed. Before the war, gold and silver consti- 
tuted the only legal tender money; but the issue of 
the United States notes gave rise to speculation as 
to whether the Government might not lawfully pay 
them in redemption of its bonds. It was said that 
they were legal tender for everything due from the 
Government except interest on the public debt. On 
the other hand it was contended that the bonds, by 
their terms, were payable in "dollars," and that 
legal tender notes were not dollars, but only 
promises to pay dollars. The latter view finally 
prevailed and was embodied in the Act of March 18, 
1869, which pledged the faith of the Government to 
the redemption "in coin" of all its obligations except 
those specifically payable in something else. 

Congress held this controversy in view when it 
authorized the refunding bonds in 1870, for the Act 
provided that the bonds should be redeemable " in 
coin of the present standard value."' 



Loans and Currency 



49 



The Act of March 14, 1900, under which tlie two 
per cent consols of 1930 were issued, provided that 
the bonds should be redeemable in United States 
gold coin. These bonds are the only obligations, 
except gold certificates, that are specifically payable 
in gold. 

Before the Civil War the Acts of Congress pro- 
viding for the issue of securities vested the authority 
therefor in the President of the United States. The 
Act of July 17, 1861, however, gave such authority 
to the Secretary of the Treasury, so the division of 
loans and currency was organized in that year. 
During the intervening forty-four years it has had 
charge of all details growing out of the issue, 
exchange, and redemption of the interest bearing 
obligations negotiated by the Government. 

There has never been an important error in its 
accounts, and none has remained untraced. Not a 
dollar has ever been lost to the Government through 
its operations, and no creditor has ever suffered loss. 

A. T. HUNTINGTON. 




[5] 




u 



en 



O 

o 

z 

H 
Z 

a. 



< 

< 

X 

u 



o 
b 




THE ISSUE OF UNITED STATES 
PAPER CURRENCY 



THE distinctive paper for all United States and 
national bank currency is made in the Crane 
Mills, Dalton, Massachusetts, under govern- 
ment supervision, shipped by express to the Treasury 
Department in Washington, and delivered to the 
bureau of engraving and printing as required. 

The plates are engraved by the bureau and 
turned over to the custodian of dies, rolls, and plates, 
an officer independent of the bureau officials, who 
only issues them on the order of the Secretary of the 
Treasury. 

When the director of the bureau has received 
an order for the printing of a certain class of money, 
requisition is made for the necessary plates and 
paper, for which receipts are given, and the plate 
printers must account, at the close of each day, for 
all plates and paper issued. 

Backs and fronts completed, the sheets pass to 
the numbering division where they are trimmed to 



52 The Issue of United 

proper width and numbers applied. After careful 
inspection for errors the sheets are put up in packages 
of a thousand each, four notes on a sheet, for delivery 
to the treasurer of the United States. 
^ Prior to 1885 the sealing and separating of the 
United States currency was done in the bureau, but 
Treasurer Jordan wisely decided that the final touch 
should be given in his office, thereby avoiding the 
danger of carrying such large sums of completed 
money through the streets. 

In September, 1778, Congress appointed a com- 
mittee to devise a seal for the Treasury, and the 
device and legend adopted then are in use today. 
The seal now in use was cut by Edward Stabler, of 
Sandy Springs, Maryland, in 1849. The legend on 
the seal is an abbreviation of the Latin sentence 
"Thesauri AmericaniSeptentrionalisSigillum," mean- 
ing "Seal of the Treasurer of North America." The 
wording would seem to indicate that as early as 
1778, before we had won independence, a majority 
in Congress favored expansion. 

The packages of currency received at the Treas- 
ury are tlrst counted, then taken to the press room 
where seals and denominational figures are applied. 
After sealing, the sheets are again counted and 
examined for imperfect or misplaced seals. At 
the close of the day the freshly sealed work is 
vaulted until next morning, when the ink is suffi- 
ciently dry for handling. It is then turned over to 
the separators, by whom the sheets are trimmed 
and the notes separated. They are put up in straps 
of a hundred notes each, the numbers being kept in 
sequence. This is the tlnal and responsible count, 



States Paper Currency 53 

the counter being required to make good any claim 
for shortage that may be established to the satisfac- 
tion of the treasurer. The four thousand notes are 
next pressed, tied, wrapped in heavy paper, sealed 
with wax, and labelled. The resultant package is 
practically a cube, and is the familiar form in which 
amounts of the United States currency are shipped 
to banks. 

When the day's work is completed the finished 
packages are delivered to the vault clerk, who places 
them in the reserve vault, where they remain until 
required, according to numbers, to replace in the 
cash old notes destroyed or to meet other lawful 
demands. From the completion of the paper at the 
mill to the packing of the finished notes there are 
sixty-one counts. 

The national bank notes are sealed at the bureau 
and delivered to the comptroller of the currency, 
who forwards them to the banks of issue. During 
the fiscal year ended June 30, 1905, there were 
sealed, separated, and placed in reserve 905,000 
gold certificates, having a value of $107,920,000; 
15,240,000 United States notes, having a value of 
$152,400,000, and 139,184,000 silver certificates, 
having a value of $249,004,000, or a total of 155,- 
329,000 notes valued at $509,324,000. 

On June 30, 1905, there were outstanding United 
States notes valued at $346,681,016, Treasury notes 
of 1890 valued at $9,413,000, gold certificates valued 
at $5 1 7,579,969, and silver certificates valued at $465,- 
265,000, having a total value of $1,338,938,985. 

The chief of the redemption division reports 
daily to the cashier the amount of each class of 



54 The Issue of United States Paper Currency 

notes destroyed, and a like amount is withdrawn 
from reserve and taken up in tlie cash. 

The only ways by wliich the volume of United 
States paper currency can be increased are through 
Congressional action, deposits of gold coin for gold 
certificates, or the exchange of silver certificates for 
standard silver dollars. 

in addition to being the keeper of Uncle Sam's 
strong box in Washington, it is the duty of the 
treasurer of the United States to have a finger on 
the financial pulse of the nation. He should know 
the wants of all sections as to currency, and endeavor 
to supply them. Knowing the advantages of proper 
seasoning of paper currency before it is placed in 
circulation, he must look far enough into the future 
to have his vaults stocked with a sufficient supply, 
that the notes may have become thoroughly dry 
before issue. In recent years it has been difficult to 
do this, since the demand for new currency has been 
greater than the bureau of engraving and printing or 
the force of his own office could supply. 

JAMES A. SAMPLE. 





v: 
z: 
< 

ca 

1 

o 
o 

z: 

O 
H 
< 

LU 
U 
< 




THE REDEMPTION OF NATIONAL 
BANK NOTES 



THE three important steps which hnve been 
taken in the evolution of bank note currency — 
restraint, ultimate security, and national 
uniformity, have given this country for more than 
forty years the best paper currency it has had. 

The follovv'ing extract from a sketch of The 
Suffolk Bank of Boston, published in 1878 for private 
distribution, interesting for its historical facts, pre- 
sents a sharp contrast between the old conditions of 
bank note redemptions and the new. 

The business man of today knows little by 
experience of the inconvenience and loss suffered by 
the merchant of sixty years ago, arising from the 
currency in which debts were then paid. The 
national bank notes which he now receives are 
current for their face value. He cares not by what 
national banks the notes are issued, where they may 
be situated, whether they are sound or whether they 
are insolvent. He receives them today in payment 
at their f:ice, knowing that to-morrow he can use 
them in any state of the Union without possibility 



56 The Redemption of 

of loss. Not so with the merchant of 1818. Receiv- 
ing payment in bank notes, he assorted them into 
two parcels, current and uncurrent. In the first he 
placed the notes issued by the solvent banks of his 
own city; in the other the bills of all other banks. 
Upon these latter there was a discount, varying in 
amount according to the location and the credit of 
the bank issuing them, and he could avail himself of 
them only by selling them to a dealer in uncurrent 
money. He could neither deposit them, nor use 
them in payment of his notes at a bank. 

This unsatisfactory state of the currency, with 
its annoyances and risks, continued till the establish- 
ment of the Suffolk System, so called, in 1824, — a 
system of redemption identical with, and which 
served as a model for, the present National Redemp- 
tion Agency at Washington. 

The national law of 1864 required national banks 
to redeem their notes at their counters, to select a 
redeeming agent from among the banks located in 
one of eighteen designated cities, and to keep on 
deposit with the redeeming agent a certain portion 
of their reserves to be available for the redemption 
of notes. These provisions, sufficient as they prob- 
ably appeared to be, proved unsatisfactory. In a 
short time the number of banks and the amount of 
notes issued, made the labor and expense of assort- 
ing the worn out notes for exchange so great a 
burden on the banks, that many requests were 
received at the Department for a change in the law 
by which the notes might be assorted and returned 
to the banks at their expense. This condition as to 
worn out notes, and the periodical accumulations of 
bank notes at money centers unavailable for bank 
reserves, continued until 1874, when the passage of 



National Bank Notes 57 

the redemption act of June 20 immediately brougiit 
to the Treasury for redemption bank notes by the 
millions in all kinds of condition and from all sections 
of the country. 

The radical change in the method of redeeming 
bank notes was the creation of a central redemption 
point in place of eighteen redemption points. Pro- 
vision was made for the return of the redeemed notes 
to the banks of issue, and for the assessment of the 
expenses on the banks in proportion to the notes 
redeemed. 

When the redemption agency was established 
there had been 2,200 banks chartered, 2,000 of 
which, with circulation of $338,^38,743, were still in 
existence. At the end of 31 years, June 30, 1905, 
the charters numbered 7,814, and the existing banks 
5,750, with circulation of $495,719,807. 

Between 1864 and 1874, under the original law, 
bank notes to the amount of $154,477,731 were 
returned to the Comptroller's office for renewal. 
The notes presented for redemption at the agency 
during 1875, the first year it was in operation, 
amounted to $155,520,880, of which sum only 
$15,213,500 was found fit for circulation. In redemp- 
tions of $209,038,855 during the second year, the fit 
notes were $97,478,700. This showed a marked 
improvement in the condition of the notes in circu- 
lation as a result of the more active redemptions. 

More than one-half of the notes received for 
redemption are from banks in New York City, and 
inclusive of the notes received from Boston, Phila- 
delphia, Chicago, and Saint Louis, they are more 
than 80 per cent of the total. 



58 



The Redemption of National Bank Notes 



The requests for United States currency, mostly 
of the denominations of one, two, and five dollars, 
in payment of notes sent for redemption, amount to 
about one-half of the redemptions. These small notes 
are furnished by the Treasury. Checks and credits 
in accounts constitute the balance of the payments. 

Before the redeemed notes can be delivered 
from the agency, it is necessary to assort them into 
groups of states arranged geographically, into groups 
of towns arranged alphabetically for each state 
group, and fmally bank by bank. 
' The expenses of the agency for the fiscal year 
1904, the last made up, were assessed on the banks 
at the rate of 84.72 cents per $1,000 of notes 
redeemed. This was 36.96 cents for transportation 
charges, and 47.76 cents for all other expenses. 

In thirty-one years the redemption agency has 
redeemed upward of four thousand millions of 
dollars in bank notes. The fact that it has satisfac- 
torily served its purpose appears to be established, 
and that it has been an important factor in main- 
taining the high standard of usefulness deservedly 
ascribed to the national bank note can not reason- 
ably be doubted. THOMAS E. ROGERS. 





_J 
LU 

< 

X 

o" 

2 

_j 

CO 

Z 



< 

I- 




REDEMPTION OF CURRENCY 



UNDER regulations prescribed by the Secretary 
of tile Treasury, tlie Treasurer of the United 
States, in Washington, and the Assistant 
Treasurers, in New York, Boston, Philadelphia, 
Baltimore, New Orleans, Cincinnati, Chicago, St. 
Louis, and San Francisco, redeem United States 
notes. Treasury notes, and gold certificates in gold 
coin, and silver certificates in silver dollars. The 
same officers also receive these paper issues, when 
worn, mutilated, or otherwise unfit for circulation, 
in exchange for new currency. 

in 1862, Congress passed an act which contains 
the following provision: " When any United States 
notes returned to the Treasury are so mutilated or 
otherwise injured as to be unfit for use, the Secretary 
of the Treasury is authorized to replace the same 
with others of the same character and amounts." 
It is the function of the redemption division of 
the. Treasury to perform the first act in the replace- 
ment with the new, namely, the displacement of 
the old. 



60 Redemption of Currency 

When paper money in a condition of unfitness 
for further use is received at the subtreasuries, the 
notes are assorted by kinds and denominations and 
forwarded to the redemption division by express. 
Such remittances are also receivable from any other 
holder; and many banks, particularly those in the 
larger cities where there is no subtreasury, are 
regular correspondents of the division, sending in a 
daily consignment prepared with the most punctili- 
ous respect for the regulations. Others, in all parts 
of the country, accept the right of presentation, 
without taking any trouble about the amenities of 
the arrangement, and produce an occasional parcel 
which is an example of all that is slovenly and 
unsafe in the handling of money. 

The routine of the division is very simple. The 
sealed packages of notes are delivered singly to 
counters, who give their receipts, it is the duty of 
the counter to examine the package, open it, pass 
upon and count the contents, to put up the notes in 
straps properly marked, to witness their cancellation, 
and to deliver them to a teller, with a signed report 
of the result. On this report, the money is taken 
up as an asset of the Treasury, and an order is 
issued for a return remittance, or for credit on 
account, as the case may require. Every precaution 
is taken to protect the counter, and at the same time 
the counter is held to an absolute and undivided 
responsibility. 

At the close of business the day's work is on 
the teller's desk, and from there, after settlement, is 
passed over to the delivery clerk and locked up over 
night in a vault. Next morning the notes are 



Redempt ion of Currency 61 

divided into lots and packages, which are numbered 
serially. The straps in each package are also dis- 
tinctively marked. The notes are then cut in two 
lengthwise, and the upper halves are delivered to 
the Register of the Treasury and the lower to the 
Secretary, in whose offices they are independently 
examined and counted. After the Treasurer's work 
has thus been doubly supervised, and any errors 
that may be found are agreed upon and adjusted, 
the notes are delivered to a committee whose duty 
it is to see that they are destroyed by maceration, 
and to file a certificate to that effect. 

On an average, more than half a million notes 
are handled each working day. In the last fiscal 
year, the redemptions amounted to over 1550,000,- 
000, or about half the outstanding volume. 

Not the least important part of the work of the 
division comes in the shape of notes which have 
been partially destroyed. Fifty or sixty small remit- 
tances are received daily, many of them containing 
the remnants of a single note. The Government is 
unusually generous in this matter, redeeming frag- 
ments, however small, on satisfactory proof of the 
destruction of the missing portions ; and the cir- 
cumstances set forth in the affidavits, are as various 
as the possibility of accident. Burning, however, 
is the chief cause of loss ; and strange as it may 
appear, the good housewives who secrete their 
purses in the stove, on which they afterward forget- 
fully cook a meal, are the most numerous class of 
sufferers. Mext perhaps come those of both sexes, 
who, in the solemn language of the notary "threw 
said money into said fire," in the pay envelope or 



62 



Redemption of Currency 



with w:iste paper. Dogs are sliown by the records 
to liave a remarkable appetite for paper currency ; 
while mice have at times had attributed to them 
degrees of discrimination which the Department has 
been unable to recognize in these vermin. 

F. W. LANT7 





COUNTING CASH IN TREASURY VAULTS 




PUBLIC DEPOSITS IN NATIONAL 
BANK DEPOSITARIES 



FROM August 6, 1846, the date of the approval 
of the Organic Act establishing the sub- 
treasury system, until 1864, the public moneys 
were deposited with the Treasurer of the United 
States in Washington and the several sub-treasury 
offices. At the beginning of the collection of internal 
revenue much difficulty was experienced in obtain- 
ing in a community a sufficient amount of currency 
to pay taxes. Congress, by Act approved June 3, 
1864, relieved this situation by authorizing the Secre- 
tary of the Treasury to designate national banks as 
depositaries of public moneys and requiring one to 
be established in each collection district. Since that 
time the bulk of internal revenue amounting to 
thousands of millions of dollars has been deposited 
with national bank depositaries and transferred by 
the banks to the sub-treasury without expense to 
the Government. Many of the large tax payers 



64 Public Deposits in 

kept their accounts with the banks which were 
depositaries. Collectors were permitted to accept 
such checks as the depositary banks were wiUing to 
receive as cash and issue certificates for at once, and 
the banks were enabled to use their exchange on 
sub-treasury cities in transferring to the Treasury 
without the necessity of shipping the actual money. 

The banks receive no compensation as deposi- 
taries for transacting the public business other than 
the use of the amount of public funds authorized to 
be held, which in the past has ranged in amount 
from ninety per cent to one hundred and ten per 
cent of the par value of the United States bonds 
held as security therefor according to the market 
value of the bonds. At present no bank may hold 
funds in excess of the par value of its security. 

At first the deposits were almost entirely on 
account of internal revenue, but later deposits were 
made with the banks located at places remote from 
a sub-treasury on account of sales of public lands, 
surveys of public lands, patent fees, semi-annual 
duty, and other miscellaneous deposits, as well as 
funds advanced to United States disbursing officers 
under authority contained in the Revised Statutes. 

The number of depositaries has been limited to 
the necessities of the public service, that is, banks 
were not designated simply upon request therefor, 
but when it was clearly shown that a sufficient 
amount of revenue was collected in the immediate 
vicinity of the place where the bank that applied 
for designation was located, to warrent the Depart- 
ment in establishing a depositary, thereby saving 
the expense of transportation by express to the 



National Bank Depositaries 65 

nearest depositary and avoiding risi< and responsi- 
bility of the collector in caring for the funds. 

In 1887 when there was a surplus of revenue 
accumulated in the Treasury, the department per- 
mitted more public funds to be held by the banks 
than had previously been held, thereby increasing 
the loaning power of the banks and relieving the 
stringency in the money market ; in this way the 
public balance was increased to $^2,000,000. As 
the accumulation continued it was decided not to 
■confine the deposits to regular depositaries already 
established but to allow any national bank regard- 
less of its location or whether there was any revenue 
collected in its vicinity to become a special or tem- 
porary depositary to the amount of the security fur- 
nished. These temporary depositaries were per- 
mitted to receive only funds transferred to them by 
the Treasurer of the United States to hold tempor- 
arily; they were first designated in i8q8 and con- 
tinued until December 19, 1903, when the holdings 
of public moneys reached the largest amount ever 
held by the banks, namely $168,286,716.52. From 
that time there was no surplus, the disbursements 
being greater than the receipts, and it became nec- 
essary to withdraw a portion thereof to make the 
large first payments on account of the Isthmian 
Canal and other large disbursements, of which due 
and timely notice was given each bank. With- 
drawals have been made since then as follows: 

Under call of March 4, 1904,128,067,560; April 
30, 1904, $11,967,981.77; May 14, 1904, $9,336,925.- 
87; November 21, 1004, $22,488,300; April 7, 1905, 
$28,828,500; total, $100,689,267.64. 

[6] 



66 Public Deposits in National Bank Depositaries 

The amount of holdings on August i, 1905, was 
to credit of Treasurer United States, $57,042,009.54 
and to credit of United States disbursing officers, 
$8,673,109.78; total, $6^,715,119.32. 

The amount of holdings of public funds by the 
banks has varied from $6,919,745.59 in 1871 to 
$168,286,716.52 in 1903. 

On August I, 1Q05, there were 547 specials, 286 
regulars, and 2 regulars for disbursing officers only, 
a total of 835. 

The department accepts as security for public 
deposits only United States bonds, except occasion- 
ally for special reasons and for temporary purposes 
other securities have been received, such as State 
and municipal bonds. About $20,000,000 of such 
bonds v^ere accepted on a basis of seventy-tlve per 
cent in substitution for United States bonds on con- 
dition that the latter were used to take out addit- 
ional circulation, and held for a year or so, but they 
have all been withdrawn and other bonds substi- 
tuted therefor. The department now accepts only 
United States bonds. District of Columbia bonds, 
Philippine bonds and certificates, and Hawaiian 
bonds, the last named are received on a basis of 
ninety per cent. 

National bank depositaries have been and are 
valuable auxiliaries to the sub-treasury system. 

E. B. DASKAM. 





H 



o 

U_I 

uu 



o 




THE SECRET SERVICE 



IF it be true— and our statistics would seem to 
indicate that it is true— that there are fewer 
counterfeits in circulation today than at any 
time during the last forty years, a large share of the 
credit for this satisfactory state of affairs belongs to 
the bank tellers of the United States. It is a 
pleasure for me to subscribe to this statement. As 
a matter of fact we have come to regard the bank 
tellers as the eyes of the service ; and of recent years 
no counterfeiter has proved himself sufficiently 
expert to produce a note which could successfully 
pass the inspection of the lynx-eyed gentlemen who 
perform their functions so modestly in thousands of 
our financial institutions. The public does not 
appreciate this, and our service receives much 
undeserved commendation for the discovery of 
dangerous counterfeits, when, as a matter of fact, 
the detection of new counterfeits forms no part of 
our functions. We have neither the opportunity, 
nor facilities for the inspection of our circulating 



68 The Secret Service 

medium necessary to enable us to discover any new 
products of the criminal engravers' art. The chief 
function of the secret service division is not the 
detection of counterfeits, but the detection and 
prosecution of the makers of counterfeits, an 
entirely different proposition. It is only within 
recent years that there has been the right sort of 
co-operation between the banks and the secret 
service division of the Treasury Department. That 
section of the federal statutes which requires that 
officers of the national bank shall brand as "bad" or 
.'" worthless" all counterfeits which may come into 
their possession, was more honored in the breach 
than in the observance. Thus, through a ground- 
less fear that the ire of a depositor might be aroused 
and his account lost, counterfeits were returned 
unbranded and given a new lease of life by the very 
men who should be most concerned in their suppres- 
sion. It was the Detroit Clearing House Associa- 
tion which paved the way for harmonious and 
consistent local action on the part of the banks, and 
it is a matter of record that most of the clearing 
house associations have incorporated as a part of 
their rules and regulations that very important para- 
graph of the federal statutes. The bankers now 
realize that their interests and ours are one, that we 
are both striving to preserve the integrity of our 
circulating medium, and that friendly and complete 
co-operation with our service is essential to the 
speedy punishment of offenders. 

Counterfeiting methods have changed and im- 
proved during recent years. The introduction of 
photo-mechanical processes has made it possible to 



The Secret Service 69 

closely approximate the beautiful line engraving 
which is characteristic of our currency. And the 
adoption of these methods has materially increased 
the difficulties of fixing the responsibility for a 
particular note. A quarter of a century ago, when 
the most deceptive coimterfeits were produced by 
graving tools in the hands of experts, there was an 
individuality about the work which would enable 
an experienced officer to say with a fair degree of 
certainty that a particular note was engraved by a 
particular individual. With the perfection of pro- 
cesses in which the camera was used to transfer the 
pattern of a note to steel or copper the sign manual 
of the maker disappeared. The camera has no indi- 
viduality, and the application of an etching fluid to 
a plate required only the skill which is possessed by 
thousands of engravers scattered all over the United 
States. This change of method in counterfeiting 
enormously increased the difficulties confronting the 
agents of this service in their endeavor to detect and 
prosecute skillful offenders against the counterfeiting 
laws. And it is a high tribute to the agents of this 
branch of the government service that counterfeiting 
as an industry is on the decline. 

During the last fiscal year there were but nine 
new counterfeit notes placed in circulation, only two 
of which could be classed as dangerous. Carefully 
tabulated returns from banks from all over the 
United States indicated that the proportion of 
counterfeits in circulation is less than one dollar in 
one hundred thousand dollars in notes,, and two and 
a half dollars in one hundred thousand dollars in 
coin. As a matter of fact more trouble is experi- 



70 



The Secret Service 



enced just at present with ''raised" notes than with 
counterfeits, and this trouble will undoubtedly be 
continued until the public has been educated to recog- 
nize the value of a note by its design, rather than by 
the denominational figures. When a community 
reaches the point where it knows that a "spread 
eagle" in the center of a silver certificate means 
one dollar, irrespective of the figures or lettering on 
a bill, the note raiser will find his occupation gone. 

JOHN E. WILKIE. 




Washington, City and Capital 








aUDDD 

LJIJDCD „_ w^, 

MOULl^iL Li Ig^ ^,, 

.c:caD^GDau UD«-Duraui^» 

j,aaaaaa.'cu pdi»uo uuctzxL 




ocr^ 












^»:^y -(^v -C t'occcig; c 



,^. 



CFCCCC 



•■(It 



yr. ADDDCCr.i'lC 
l».C Di\)DCCF£CP.'lC 

dcdS 

P 



□ CCC QDD, CD 
tZC C DDDC 4 

c- aaoDocn to 





to 



o 



< 



O 

o 



< 



o 

t 
u 

X 

o 

< 




=0 

to 



o 
I— 
o 

z: 



< 



o 

>- 

U 

LU 

H 

Ll_ 

o 

UJ 
> 




THE NATIONAL CAPITAL 



THE National Capital was founded by George 
Washington, who planned "the Federal City" 
which Congress named for him. Last of his 
great deeds, this interested him more than any other 
after the winning of the Revolution and the making 
of the Constitution. Like the Constitution itself, its 
creation was closely related to the finances of the 
infant republic. The very idea of a federal district 
absolutely under national control for a national 
capital was suggested by the attempt of the unpaid 
soldiers of the war of the Revolution to collect 
arrears in 1783, by an attack with arms which 
frightened Congress out of Philadelphia. 

The Federal District was placed on the Potomac 
as the price to the South of the assimiption by the 
Nation of the state debts of the Revolution as desired 



74 The National Capital 

by the North, under the famous agreement between 
Thomas Jefferson and Alexander Hamilton. Robert 
Morris, the financier of the Revolution, linked by his 
personal speculations in the real estate of the new 
capital, the eighteenth century with the nineteenth, 
as Jay Cooke, the financier of the Civil War, whose 
brother was the first Governor of the District of 
Columbia, linked the nineteenth century with the 
twentieth. The Federal Treasury, with its connec- 
tion first with United States banks and later with 
the sub-treasuries and the national banks, has been 
the center of the financial interests of the country. 

The young national government was penniless 
when George Washington established the National 
Capital. He had to beg personnally from the nine- 
teen original proprietors of the farms upon which 
"the Federal City" now stands, the land needed by 
the national government for its buildings and for 
streets and parks, and he had to sell some of this 
land and to borrow money from Maryland and 
Virginia, the mother states which had ceded the 
sovereignty of the ten miles square, to build the 
President's House, Congress House, and the other 
government buildings. The far-seeing Washington 
planned the city on a grand scale, according to his 
faith in the perpetuity and development of the 
United States, then so small, so poor, that the men 
who doubted whether the new government could 
long survive found many to laugh with them at the 
plans which the experts cannot now improve upon 
and which record Washington's genius as books can- 
not do. The first great expansionist, the only great 
American who had been west of the Alleghanies, 



The National Capital 75 

the man of greatest vision in his time, and with the 
most confidence in the vitality of the young republic, 
he planned a national capital for the greatest country 
in the world. 

Washington died in 1799 without seeing the 
national government moved from Philadelphia to 
Washington, where it came, under President John 
Adams, the next year. The death of its founder 
prevented the national government from beginning, 
as soon as its increasing income justified the expendi- 
ture, the development of the National Capital, on 
the plans which he had laid down. By the time 
the United States could no longer plead poverty it 
had settled in a habit of neglecting its capital, and 
had thereby encouraged an agitation for the removal 
of the capital to the Mississippi Valley, which never 
ceased until after the Civil War, and, which in turn, 
prevented proper treatment of Washington. Indeed, 
for seventy-eight years, beyond building structures 
for its own use, improving their grounds, and build- 
an aqeduct primarily to supply them with water, the 
national government did practically nothing for the 
National Capital. The people who lived here had to 
bear all the rest of the expense of the making and 
maintenance of the National Capital. At times they 
went deeply in debt in the undertaking. The burden 
became so heavy by 1846 that Alexandria, George 
Washington's market-town, procured the retroces- 
sion of the territory Virginia had given south of the 
Potomac. The task of the nation was too great for 
the people of the District of Columbia. The Civil 
War, which made Washington as the seat of 
government and a prize of the strife at once far 



76 The National Capital 

better known nnd far more precious to the victorious 
Union, ended all serious talk of removing the capital 
and brought the national government to realize its 
obligation. 

President Grant and a congress of like politics 
gave power to a new government of the District, 
with Alexander R. Shepherd, a native Washington- 
ian of talent and force, as its ruling spirit. In 1871 
it took up the dust-covered plans of George Wash- 
ington, and began the general improvement of the 
streets and avenues of Washington City. The time 
was short and the work was done hastily and 
roughly, (the city was only plowed up,) but so 
thoroughly that it was easier to complete it than to 
undo it, and all the subsequent development has 
come from it. 

The protest of the District tax-payers, still 
expected to pay for such improvements and griev- 
ously overburdened, the panic of 1873, and a change 
in the political control in Congress, ended the 
"Shepherd regime," with its territorial form of 
government and its two Governors, Henry D. 
Cooke and Alexander R. Shepherd. This was the 
first executive government for the entire federal 
District. The cities of Washington, Georgetown, 
and Alexandria had had separate municipal govern- 
ments, with Mayors and Councils elected by quali- 
fied voters, while the counties of Washington and 
Alexandria had county governments. 

From 1874 until 1878 Congress was considering 
a permanent form of government, meanwhile con- 
fiding the administration to a temporary Commis- 
sion of three. Congress in the exercise of its con- 



The National Capital 77 

stitutional power "of exclusive legislation " over 
the District of Columbia had to provide an execu- 
tive government; it had to provide for a just recog- 
nition of the duty of the National Government to its 
Capital, and of its obligation as the owner by gift of 
more than a half of the city of Washington. it 
determined that there should be an executive gov- 
ernment of three Commissioners, two appointed by 
the President of the United States from residents of 
the District, and the third an army engineer of high 
rank, and that the United States should pay annually 
one-half of the municipal expenses and should 
assume one-half of the bonded debt incurred by the 
territorial government. It made no provision for the 
Nation's arrears estimated at seventy-five millions. 
The property holders generally wished to relinquish 
the suffrage exercised until 1874, and Congress, 
appreciating their reasons and also regarding it as 
incompatible with the new tlnancial arrangements, 
since the United States could not submit to be taxed 
by District voters, abolished the privilege of voting, 
in June, 1878, the act which the United States 
Supreme Court terms "the Constitution of the Dis- 
trict of Columbia," was passed, and since then the 
entire District has been under the executive govern- 
ment of the Commissioners, which is actually a 
government by public opinion, as there is no partisan 
politics, no "boss," or "machine," or partisan news- 
paper, to confuse or defeat the voice of the people. 
Although there is general hope that som.e day Sena- 
tor Hoar's proposition to have the National Govern- 
ment bear all the expenses of the National Capital 
over and beyond what the District residents contri- 



78 



The National Capital 



bote under reasonable average taxation, the "half- 
and-half plan " is so ^reat an improvement on the 
conditions preceding it, that it has been generally 
acceptable both in Congress and in the District. 
Modern Washington and its suburban towns have 
practically developed under the present form of 
government. The progress made in twenty- five 
years is the sure prophecy of the progress to be 
made in the future. The National Capital, now 
that it has been fully taken into the life of the 
nation, must grow with its growth— as the country 
deserves. The population of the District, number- 
ing over three-hundred-twenty thousand, with a tax 
levy of about tlve-and-a-half million (under a dollar- 
and-a-half-a-thousand rate and a two-thirds assess- 
ment,) is doing its full share for the present and for 
the future. As it increases and spreads all over the 
hills of the District, until the city of Washington 
extends to the District line, it will do its part in 
making this more and more the most beautiful 

capital in the world. 

HENRY B. F. MACFARLAND 





< 



uj 



O 

o 

H 
a. 
< 
U 




NATIONAL POLITICS AND INTER- 
NATIONAL DIPLOMACY 



WASHINGTON is pre-eminently the political 
center of the United States. Every con- 
test which is waged in Congressional 
district or State legislature reaches its climax in the 
national capital, where, under the great white dome 
of the stately Capitol, the men who have been suc- 
cessful in their campaigns before the people assemble 
to enact the national laws. Most important of all, 
the quadrennial election for President determines 
who shall reside in the White House in Washington. 
In the halls of Congress occur the famous debates 
which outline the political issues of the leading 
parties. Within the White House occur the confer- 



80 National Politics and 

ences which affect the political situation in the 
remotest corners of the Republic. 

It is difficult to write of the position of Wash- 
ington as the political center without indulging in 
apparent exaggeration, it literally breathes an 
atmosphere of politics. Its population, representing 
every State, is largely composed of politicians of 
greater or less degree, who observe the political 
barometer with the interest and anxiety attending 
financial quotations in the commercial cities. It is 
in Washington that the political leaders manoeuver 
for position in the months that precede a national 
campaign. It is from Washington that tons upon 
tons of literature concerning political issues are 
shipped to the voters throughout the land. One 
recalls, for instance, how the attempt to educate the 
country into the belief that the free coinage of silver 
was a panacea for every material ill was directed 
from Washington, while in the periods of tariff 
discussion the utterances of the polical leaders in 
Washington are heralded broadcast. In Washington 
the political heart of the nation throbs with intense 
eagerness. 

There was a time, happily long past, when 
the material interests of Washington were largely 
dependent upon the turn of political fortune — when, 
on the eve of a Presidential election, the fate of 
thousands of federal employees trembled in the 
balance. In those days a change in administration 
meant a clean sweep in the government departments. 
There was little permanency in the great mass of the 
population. With the stability which a carefully 
administered civil service law insured, the injurious 



International Diplomacy 81 

effect of political change is no longer felt. In the 
olden days, the fact that Washington was the politi- 
cal center of the nation was a detriment to the city's 
progress. To-day, Washington develops in mag- 
nificent proportions, well knowing that no matter 
which party is in power, there can be no wholesale 
uncertainty or upheaval. Under these conditions, 
there is a steady rise in real estate values, a constant 
growth of mercantile interests, a gratifying increase 
in individual bank deposits. In other words, Wash- 
ington now enjoys all the benefits of its political 
importance without any of the drawbacks formerly 
experienced, a fact which it is worth while to 
emphasize in a publication intended to present the 
phases of Washington life to the leading financiers 
of the country. 

The conditions which make Washington the 
political center naturally operate to make it promi- 
nent in the diplomatic world. It is the abiding place 
of the ambassadors and ministers from foreign 
countries and it is here that the grave questions of 
international law, comity, and usage are decided. 
It is the city wherein treaties are made and ratified; 
it is the place where the policy of this government 
respecting other nations is formulated and then 
communicated to the world. Its importance in this 
regard has vastly increased since the war with 
Spain, being especially notable in the effort inaugu- 
rated by the United States Government to preserve 
the integrity of China. The forcefulness of President 
Roosevelt's character, assisted by the astuteness of 
the late Secretary of State, has given unwonted 
energy to our foreign policy, culminating in the 

[7) 



82 National Politics and International Diplomacy 

splendid episode which marked the agreement of 
peace between japan and Russia. There have been 
man\' diplomatic events of noteworthy interest in 
Washington, but these pale into insignificance beside 
the remarkable achievement of President Roosevelt. 
With characteristic courage, he grasped a delicate 
and difficult situation and by the exercise of rare 
diplomacy, succeeded in securing the desired culmi- 
nation. This individual act has inestimably raised 
the importance of Washington from a diplomatic 
point of view. The city is no longer an insular 
capital, it is a factor in the determination of world 
problems. Every citizen of Washington has always 
had occasion to feel proud of his residence here, but 
in the future this pride can well be experienced in 
even greater degree. The city is a capital among 
capitals, not only in a political sense but in the 
wider and broader field of participation in inter- 
national affairs. 

HENRY LITCHFIELD WEST. 











^ ^■'' €f 



WASHINGTON DURING WAR TIME 




HISTORIC WASHINGTON 



THE history of a nation's capital is the history of 
the nation. It is at the seat of government 
that learned men versed in statecraft meet, 
and there national politics and policies are deter- 
mined, and there laws are made, construed, and 
executed. 

For one hundred and five years Washington 
has been the arena in which political parties have 
risen, have fought and have fallen. 

The tlrst year it became the Capital, the Demo- 
cratic party triumphed, and the Federal party passed 
from power, never to be restored. 

It was in Washington that Chief Justice 
Marshall made an epoch in history by establishing 
the principles of American jurisprudence, and as a 
tribute to his memory, a street fronting the court 
house bears his name, and a statue in his honor is at 
the foot of the Capitol. 

The Louisiana Purchase in 1803, one of the 
most important events in the Nation's history, was 
conceived at the White House by Jefferson. 



84 Historic Washington 

The successful war against the Barbary States 
was declared at Washington, and the house built by 
Stephen Decatur, "Hero of Tripoli," and in which 
he lived, still stands. 

The admission of Ohio to the Union added 
a new star to the Country's tlag, which has been 
followed by a galaxy representing peerless States 
in an indestructible Union. 

The embargo and non-intercourse acts, to com- 
pel recognition of American neutrality, the War of 
1812, the capture and burning of Washington by the 
British— disgraceful alike to both participants, the 
Treaty of Ghent, were events in the second decade 
of the Nation's Capital. 

Monroe announced from Washington that 
"American continents were not to be considered as 
subjects for colonization by European powers. ' 

Here Calhoun boldly proclaimed nullitkation, 
and Andrew Jackson replied by ordering troops and 
a man-of-war to Charleston to enforce the law. It 
was in the old Capitol that Webster and Ha>ne met 
in fierce debate and Henry Cla>' by a compromise 
postponed civil war for thirty years. 

Here the Webster-Ashburton treaty was con- 
cluded, and later the treaty of Wasiiington. 

The first telegraph line was built by Morse 
between Washington and Baltimore, and over it 
flashed the words "What hath God wrought?" 

The Oregon Boundary dispute was settled in 
Washington. 

Here the Mexican War was planned. 

To our credit slavery was abolished in the Dis- 
trict of Columbia eleven years before the Civil War. 



Historic Washington 85 

Intercourse was established between the United 
States and Japan in 18^4, and the wonderful collec- 
tions of rare objects brought by the Wilkes Expedi- 
tion are in the "National Museum. 

The controversy as to whether the people should 
decide for themselves that a state should be free or 
slave-holding was started by the Douglas-Kansas- 
Nebraska Bill. 

Chief Justice Taney rendered the opinion that 
"Negroes were not citizens of the United States and 
they could not become such by any process known 
to the Constitution," a decision that had much to 
do with the election of Lincoln. 

In the great Civil War, the campaigns for the 
Union were planned and directed from Washington, 
and the part that the troops from the District of 
Columbia performed before the arrival of the forces 
from the North still remains unrecognized. 

Few know that when Jubal Early was pounding 
at the outposts of surprised Washington, President 
Lincoln stood on the parapet at Fort Stevens, 
exposed to the fire of the enemy, thus encouraging 
the Union soldiers to deeds of valor. 

It was up Pennsylvania Avenue at the close of 
the war that the victorious armies of the North 
triumphantly marched. Over this same avenue 
have passed many inaugural and other processions, 
as well as the funerals of our three martyred 
Presidents. 

It was on this avenue that Admiral Dewey was 
escorted by President McKinley, and at the Capitol 
was presented with a sword, the gift of a grateful 
Nation. 



86 Historic Washington 

It was in the White House and Capitol that 
exercises celebrating the One Hundredth anniver- 
sary of the establishment of the permanent seat of 
government were held, and in the White House 
President Roosevelt planned the peace conference 
between Russia and Japan. The active participants 
in these and other events equally important, have 
been our neighbors and friends, and \et the official 
history of the District of Columbia remains 
unwritten. 

Appreciating the desirability of such a work, 
the Washington Board of Trade has organized a 
movement and appropriated funds to assist in pre- 
paring such a history. 

Much labor has been saved the historian by the 
Columbia Historical Society, and through the splen- 
did work of the late Dr. J. M. Toner, Dr. S. C. 
Busey, Ainsworth R. Spofford, W. B. Bryan, John 
B. Larner, Allen C. Clark, Gaillard Hunt, Arthur J. 
Parsons, Dr. Marcus Benjamin, and other writers, 
also by William P. Van Wickle and his committee 
of public spirited citizens, who have placed tempo- 
rary markers on many forgotten historic buildings 
and sites that have given pleasure to thousands of 
Americans visiting their Capital. These markers 
should be made permanent and of bronze, for " The 
City that now bears the founder's name will be the 
Capital of the Universal Republic." 

w. V. cox. 




o 

< 

D 
O 

< 

z 



LU 
> 

LU 

o 
o 



Q 

LTi 
LU 
Qi 
Q- 

H 
< 

O 



3 



o 

z: 

LU 
Q_ 

LU 

■X. 




WASHINGTON AS A POLITICAL 
AND SOCIAL CENTER 



SOME years ago an American Minister in Berlin, 
being asked by Prince Bismark whether the 
advisability of pkicing the capital of the United 
States in New York had ever been considered, 
answered, No, that the fathers of the Republic had 
placed the capital where it is, because they did not 
desire it to become a great business center. Now, 
of this reply, it must be said, as was said of a certain 
rule in Hebrew grammar, " Precisely the reverse is 
the state of the case." One reason why the banks 
of the Potomac were selected for the capital was that 
the situation offered great commercial probabilities. 
When the federal district was laid out it was made 
to include two thriving commercial towns, George- 
town in Maryland and Alexandria in Virginia. Past 
them the river flowed, and there was a water high- 
way to the Chesapeake and the sea, and the whole 
outside world lay beyond. Following the river to 
its source, it went nearly to Ohio, and with short 



/ 



Washington as a Political 



portages tapped an unknown inside world — the 
West with its incalculable trade possibilities. The 
whole channel of commercial thought was a channel 
in the water. A stage coach carried only ten people 
when it was crowded, and its capacities for freight 
were insignificant; but there was hardly a limit to 
the amount of freight which large boats could carry. 
That city was destined to commercial greatness, our 
forefathers thought, which had advantages of water 
communication, and such advantages the capital had 
to an unusual degree. 

But with the coming of the throttle and the 
rail departed the hope of the fathers that the capital 
would be a great business center ; and undisturbed 
by the distractions of commercial life, it was left 
free to fulfill its real destiny. 

It was the political center of the new world 
from that hour on Saturday, November i, 1800, 
when John Adams, President of the United States, 
drove into it and took possession of the White 
House, and it became the social center two weeks 
later, when Mrs. Adams arrived ; for, although one 
may ordinarily separate social life from political life, 
to the head of the state attaches a general primacy, 
and his wife is a more important woman than any 
other man's wife. 

Although it was the political and social center 
from the beginning, few people took kindly to the 
budding town. The government had been sitting 
in Philadelphia, which was the most populous and 
the most luxurious city in America ; before that it 
had met in New York, which was an agreeable place 
with beautiful environs. Although nobody con- 



AND Social Center 89 

tended that Mew York would ever be as fine a city 
as Philadelphia, it was a paradise compared with the 
new federal city, which was at first an abominable 
place to live in— a place where the hand of man had 
destroyed the beauties of nature and as yet erected 
nothing beautiful in their place. There was another 
difficulty with which the new city had to contend. 
It was by no means generally accepted as a final 
decision that the capital would remain on the banks 
of the Potomac. The power that made it could 
break it, and some day when the South might be in 
a minority Congress might pass a law selecting a 
new site for a capital at some more Northern point. 
Probably this very thing would have happened had 
it not been that a Virginia dynasty, which was, of 
course, unalterably opposed to moving the capital, 
held the supreme power for the first twenty-four 
years of the city's existence— from the coming in of 
Jefferson in 1801 to the going out of Monroe in 1825. 

But the public men were obliged to live here, 
whether they liked it or not, and they made up its 
life. There were some people here before they came 
busy, making ready for them, and after they came 
there grew up around them a community which 
ministered to their wants, and all of them made 
merry together. 

From these remarks it may be inferred that the 
social side of Washington has always been appur- 
tenant to the political side. Such was the fact 
absolutely; such is now the fact qualifiedly. More 
and more each year, with a force that acquires 
strength as it goes, the city is becoming a resort for 
people who merely wish for a pleasant place to live 



90 Washington as a Political and Social Center 

in, and fmd Washington the most pleasant of 
American cities, and they constitute a circle apart 
from the political circle. They began to come soon 
after that marvelous change took place about a 
generation ago, when Washington ceased to be an 
ugly town with a problematical future, and suddenly 
appeared before the world as the most beautiful of 
capitals; then men of leisure, elegant and otherwise, 
came among us. 

Here, then, is the city: First, the President of 
the United States— first everywhere; second, the 
permanent high officials of the government who 
live here all the year around and are therefore 
Washingtonians; third, the passing throng of poli- 
ticians and statesmen who never become domesti- 
cated, who live in hotels or boarding houses, who 
come only when they must and leave as soon as 
they can; fourth, the people of the city who live 
here forever and toil and spin; and finally, the rich 
builders of palaces who neither toil nor spin and 
wear Solomon's robes. 

GAILLARD HUNT. 



- //- 9900 




o 
[- 
o 
z 

X 

in 
< 



o 
>- 
< 

en 



y 
I 

Q- 

UJ 

o 



< 




WASHINGTON 
AS AN EDUCATIONAL CENTER 



THE Capital of every nation should be the great 
center from which should flow to all sections 
the knowledge brought together at govern- 
mental expense for the benefit and enlightment of 
all the people. So Washington, viewed from the 
stand point of higher education, should be the seat 
of learning of America. 

Our first President, the founder of the city of 
Washington, undoubtedly cherished this idea, as 
his speeches, letters, and messages aie full of the 
subject of a National University in the Capital City. 
In his last will and testament he provided that 
$25,000 from his estate should be set aside and used, 
"towards the endowment of a University, to be 
established in the District of Columbia under the 
auspices of the General Government." 

Congress has never taken up seriously the sub- 
ject of a National University, and it is believed that 
the idea of Washington will never be adopted by 



92 Washington as an 

the Government. If a National University be estab- 
lished it must be through private sources. This 
subject is now freshly before the nation, and the 
work of The George Washington Memorial Associa- 
tion may, in the near future, be crowned with that 
success which it so richly deserves. 

Notwithstanding the fact that Congress has not 
taken up the subject in the manner proposed by 
Washington, that body has constantly recognized 
and materially aided in upbuilding the educational 
system of the Capital. Today it may truthfully be 
said that in every line of study may be found here 
the highest authority, and the greatest amount of 
data, all at the service of the student. 

The student, therefore, who desires an educa- 
tion on the most liberal and complete basis must 
recognize the great advantages of the city of Wash- 
ington, not only for his rudimentary and academic 
education, but especially for his post-graduate work. 
The early education of a man or woman should be 
with the future or life work in view. Whether such 
work is intended to be along the line of politics, 
law, medicine, or any branch of science, with rare 
exception, at Washington is to be found the greatest 
advantages for research, and especially for original 
research. Here the greatest men of the nation are 
to be found and not a few of them are connected as 
teachers and professors with our schools, colleges, 
and universities. These schools, colleges, and 
universities are of a high order and compare favor- 
ably with those located elsewhere having the 
advantages of munificent endowments. The ad- 
vantages of the Capital greatly overbalance, so far 



Educational Center 93 

as the student is concerned, the large endowments 
which are each year being given to the universities 
of the north and west. 

The various Departments of the United States 
Government, in which are employed large numbers 
of high class scientific men who devote their time to 
the study of their specialties, would seem, of itself, 
to demonstrate clearly that the center of scientific 
education, at least, is here in the city of Wash- 
ington. "No student of any subject is denied the 
benefit of the great scientific libraries owned by the 
Government — on the contrary every effort is made 
to encourage and stimulate such work. The great 
mass of information annually collected is at the 
service of the student and no where else can such 
advantages be obtained. 

The ability and success of men who have held 
important positions in the Government service and 
who have taken advantage of the technical knowl- 
edge surrounding them, is being constantly recog- 
nized, and such men as Knox, Cannon, Lacey, 
Eckels, Vanderlip, and Dawes have been called 
from Washington to occupy important positions 
with great financial institutions elsewhere. 

In the Universities of Washington, among 
which may be mentioned, The Georgetown Univer- 
sity and The George Washington University, are to 
be found students from every state and territory as 
well as from other nationalities pursuing with great 
enthusiasm graduate and post-graduate studies. 
Graduates will be found occupying positions of 
honor and trust everywhere in the professional, 
financial, and commercial circles. These universities 



94 



Washington as an Educational Center 



are known and respected for the high class of work 
being done in all departments, and deserve recogni- 
tion from patriotic citizens interested in the welfare 
of our great Capital. 

The public schools, managed by a Board of 
Education selected from the best and most respected 
citizens of the city, are of the highest order and 
doing the very best work possible in the common 
school system, in these schools there are over fifty 
thousand students and upwards of thirteen hundred 
teachers. 

In addition to the eduational institutions above 
referred to there are other universities, colleges, 
seminaries and private schools of all grades through- 
out the District of Columbia drawing, especially in 
the schools for young women, students in large 
numbers from all parts of the United States. The 
growth of all these schools during the past ten years 
has been phenomenal, and is a strong indication of 
the public opinion prevailing outside of the National 
Capital of the advantages of Washington as a Center 
of Education. 

JOHN B. LARNER. 





I- 

< 

z: 
< 

uJ 
U 






< 



O 

H 

Q 

UJ 

H 

o 
> 



=3 
_j 
U 

o 

o 
u 

LXJ 

11 




WASHINGTON AS A LITERARY AND 
SCIENTIFIC CENTER 



GREAT libraries attract great students, and so 
the Library of Congress with its vast 
collection of books, numbering nearly a 
million and a half of volumes, is the library 
in the United States at which scholars speci- 
ally congregate to consult its numerous treasures. 
Largely among such students are naturally those 
who are devoted to the production of works requir- 
ing research into history and during the summer 
months and other vacation periods there are many 
persons who make Washington their home in order 
to prosecute their studies. The later historical 
works of Edward Eggleston received their finishing 
touches from the hands of their lamented author 
during a winter spent in our midst. Similarly the 
valuable contributions to the history of our country 
by John Spencer Basset have been prepared by him 
during vacation periods spent in Washington, ' ' The 



96 Washington as a Literary 

Northwest under Three Flags" by Charles Moore is 
likewise typical of the kind of work that has 
received its highest development under the fostering 
influences of the Library of Congress. George 
Bancroft, perhaps the most eminent of all American 
historians, spent the last years of his long life in our 
city. "Through One Administration" by Mrs. Bur- 
nett, and "Senator North" by Miss Gertrude Ather- 
ton may be cited as examples of the works of tlction 
that have been published as descriptive of the politi- 
cal life of the Nation's Capital. 

The romances of Mrs. E. D. E. N. Southworth 
were mostly written in the well known cottage 
which was for so many years her home and where 
she died. Thomas Nelson Page, whose tine touch 
reveals itself in such masterly prose, makes Wash- 
ington his home, and Miss Charlotte B. Taylor 
is fast winning laurels among the younger set of 
writers. Mrs. Crowninshield's "The Archbishop 
and the Lady" and "Valencia's Garden," Miss 
Seawell's "A Virginia Cavalier," Frederic Emery's 
"A Maryland Manor" and Professor Newcomb's 
"His Wisdom, the Defender" should be mentioned 
as representative fiction of recent years. 

Poets are not common, but Francis Scott Key, 
John Henry Boner, and our much loved John Hay 
and his gifted daughter, Helen Hay Whitney, were 
residents of this city, and it would not be easy 
to fmd their equal anywhere. Distinguished offi- 
cials have always found time to contribute to 
literature, and memoirs such as James G. Blaine's 
"Twenty Years in Congress," S. S. Cox's "Three 
Decades of Federal Legislation," John Sherman's 



AND Scientific Center 97 

"Recollections of Forty Years in House, Senate 
and Cabinet," and Simon Newcomb's "Reminis- 
cences of an Astronomer" may be mentioned. 
General Greely's "Three Years of Arctic Service," 
John W. Foster's "Century of American Diplom- 
acy," and Admiral Evans's "A Sailor's Log" should 
be referred to as worthy examples of a class of 
literature that is largely on the increase. 

Great works of reference requiring the best of 
literary ability for their perfection are now seldom 
made without the aid of many of the specialists who 
live in Washington. Dictionaries, such as the Cen- 
tury, the Standard, the International, and the New 
Worcester; cyclopaedias, such as the Universal, the 
International, and the Americana, and year books, 
such as Appleton's Annual and the International 
Year Book include among their most valued con- 
tributors such well known writers as Egan, Gill, 
Howard, McGee, and True. 

Able newspaper writers like Carpenter and 
Curtis, whose homes are in our midst, have collected 
their extensive experiences into volumes that have 
been published to their credit. Mary Clemmer 
Ames, author of "Ten Years in Washington," Grace 
Greenwood, and Kate Field were famous corres- 
pondents whose memories still linger among us. 

The dividing line between literature and science 
is easily crossed. 

For the development of mathematics and its 
applications, especially geodesy, review the publi- 
cations of the Coast Survey and the results achieved 
by Bache, Peirce, Hilgard, Mendenhall, and Wood- 
ward will at once demonstrate that these students 

[8] 



98 Washington as a Literary 

were foremost among their contemporaries. The 
newer Bureau of Standards, under the able guidance 
of Stratton, is revealing to the world the possibilities 
of metrology. 

The splendid discovery of the moons of Mars by 
Asaph Hall while he was connected with the Naval 
Observatory, and the contributions to the science 
of Astronomy by Gilliss, Eastman, Newcomb, and 
Harkness are sufficient to indicate that the labors of 
the star-gazers have not been in vain. 

The many scientific bureaus of the various 
departments have also contributed extensively to the 
practical development of science for our modern 
daily wants, and especially has this been the case 
with the Department of Agriculture. More eloquent 
perhaps than a detailed description of the different 
bureaus is their simple enumeration. They are: 
Animal Industry, Plant Industry, Forestry, Chem- 
istry, Soils, Entomology, and the Biological Survey. 
See what they reveal. Animal Industry includes the 
study of the diseases of animals, their treatment, and 
their prevention, as well as the beneficent infiuence 
of pure milk. Plant Industry involves the study of 
plants and plant products in all its ramifications 
from seeds and fibres to new fruits and vegetables. 
Forestry means the saving of our timbered regions 
and the consequent staying of storms. Chemistry 
stands for pure foods and pure drugs — in other 
words, health and life. Soils means that the best 
methods available to science are pursued in order to 
learn and then to teach what soils will yield most 
abundantly. Entomology preserves life, both human 
and plant, from the ravages and poisons of insects. 



AND Scientific Center 99 

Lastly, the Biological Survey gives us a practical 
knowledge of the life histories of animals. 

Great institutions like the Smithsonian and the 
Carnegie have exercised a beneficent intluence 
on the development of science. From the Smith- 
sonian has come the inspirations that have led to 
the Weather Bureau, the Geological Survey, the 
Fish Commission, the National Museum, and the 
Bureau of American Ethnology. In Meteorology 
the v^ork of Coffin, Ferrell, and Abbe are classic. 
The great Geological Surveys administered by Hay- 
den, Wheeler, King, Powell, and Walcott are evi- 
dences of the splendid work done in that direction. 
In the publications of these surveys are the marvel- 
ous paleontological studies of Cope, Marsh, New- 
berry, Ward, and others. The Fish Commission 
conserves the edible products of sea, lake, and rivers 
for our benefit. The National Museum is the great 
store house of treasures of all kinds that are dis- 
played for the benefit of the Nation. In Ethnology 
we have the valuable aboriginal studies by Mason 
on basketry, by Holmes on pottery, and by Gushing 
and Hough on folk lore. 

In the increase and diffusion of literature and 
scientific knowledge the city of Washington stands 
pre-eminent in the United States. 

MARCUS BENJAMIN. 




H FRONT OF T 




it 










WASHINGTON AS A 
FINE ART CENTER 



THE time is approaching when Washington will 
be an important, if not the most important, 
center in the United States of the fine arts, 
architecture, painting, sculpture, and music. 

Architecture, which includes buildings and land- 
scape, was carefully considered in the original plan of 
the City, and in the selections of sites and designs for 
Federal buildings. Presidents Washington, Jefferson, 
and Madison personally interested themselves in 
securing artistic expression and the most skilled men 
in their professions without reference to political or 
personal preference, to design the landscape and 
buildings. A dark period in Federal art began about 
1850, and continued without a ray of light for nearly 
fifty years. This depreciation was due to lack of 
interest shown by the presidents of that period and 
to congressional legislation, which ignored the noble 
plan left to them by the father of the Republic. The 
Centennial Committee at the one hundredth anni- 




■.its '., ■">. 



'^%^i4 






1 

J 



SOUTH FRONT OF THE WHITE HOUSE, 1905 



102 Washington as a 

versary of the estnhlishment of the seat of govern- 
ment in the City brought forcibly to the attention of 
the country the Uici< and the neeci of a systematic 
art development in the Capital. Senator McMillan 
appreciated the unfortunate growth of the city with 
discord, not harmony, between its related parts, and 
without a general artistic composition. 

Acting upon a suggestion of the American Insti- 
tute of Architects, he, by a resolution of the Senate, 
appointed a Park Commission to report on the future 
artistic development of Washington. Their report 
received the unqualified endorsement of cultivated 
people in Europe and America. The Commission 
presented a scheme including the salient features of 
the plan of L'tinfant and Washington, and a develop- 
ment of new portions of the city in harmony with 
the original scheme. The following structures are 
already being erected in conformity with that report. 
The Union Railway Station, the National Museum, 
the building of the Department of Agriculture, the 
office buildings for the Senate and House of Repre- 
sentatives, the Municipal Building, the home of the 
Daughters of the American Revolution, and George 
Washington University Buildings. The continued 
development of the city on the lines suggested, 
will make Washington the most attractive city in the 
world from an artistic standpoint. Its buildings, 
parks and statuary will form an art composition in 
which the various parts will be in harmony, a place 
of residence worthy of, and attractive to, all who 
have artistic perception. 

The Federal Government should be the principal 
agent for disseminating the retining and educative 



o 

TO 

O 

c 

a 

1— 

> 



O 



m 



?o 

m 

> 

m 

a 

CO 
> 

n 
O 



O 










M 








Fine Art Center 103 

influence of art among the people, through the 
character of work authorized in its buildings, parks, 
statuary, and paintings. This end will be most 
effectually accomplished by the various national art 
associations locating their principal offices in Wash- 
ington, where their influence for good will be most 
effective. 

In 1900 the American Institute of Architects 
established its permanent headquarters in Wash- 
ington, and through its endeavors much has been 
accomplished for the good of national art. The 
Tarsney Act, under which the Government has 
secured the services of many of the most capable 
architects of the country in design, construction, and 
execution, and under which many Federal buildings 
are being erected, was made a law by the efforts of 
the Institute. This society had much to do with 
securing the appointment of a Park Commission to 
report on the development of Washington City; 
with the assistance of those interested in art, pre- 
vented the remodeling of the White House and 
extension of the Capitol on lines which would have 
destroyed their beauty; and preserved the Mall, by 
demonstrating that an improper location of the 
building of the Department of Agriculture would 
destroy the future artistic development of the city. 

Under the Incorporation Act of March 3, iQo'7, 
the American Academy in Rome located its principal 
office in Washington. The American Academy in 
Rome is a postgraduate school which will select by 
competition, each year, the most capable applicants 
in architecture, sculpture, painting, and music, and 
send them to Rome. From the talented young men 



104 Washington as a 

who secure these prizes, the Government may 
secure artists capable of executinu' future work of tiie 
highest character. 

The Public Art League is a national association 
organized in Washington to secure an Art Commiss- 
ion, who will have authority over art interests of 
the Government. The work of this society has to a 
certain extent been accomplished in the ruling by 
President Roosevelt, that "no buildings shall be 
erected in the future by any of the Executive Depart- 
ments without consulting with the Park Commission 
as to their location and design." 

There are several active local organizations, such 
as the Washington Society of Artists, the Washington 
Water Color Society, the Washington Architectural 
Club, which hold interesting and educative yearly 
exhibitions. 

The Washington Chapter of the American Insti- 
tute of Architects has taken an active interest in the 
artistic development of the city, and is frequently 
consulted by the local authorities. 

During the past year two local societies have 
been organized with very nearly the same object in 
view; one named the National Society of Fine Arts, 
the other the Society for the Artistic Development 
of Washington; these societies will begin actual 
work during the coming winter. What is needed 
for a continued development is a legalized Commis- 
sion or Bureau of Fine Arts, centralizing all branches 
of fme arts, under capable heads. 

By law the Smithsonian Institution is the cus- 
todian of art material belonging to the Government. 
They have never developed this branch of the work, 



Fine Art Center 105 

but when the new National Museum building has 
been completed the management of the Institution 
propose to take active steps towards securing 
examples of tine arts. 

The Corcoran Gallery, endowed by W. W. Cor- 
coran, is an active institution with a large collection 
of statuary, paintings, and bronzes, many of which 
are valuable works of Art. 

The future seems bright for Federal Art when 
President Roosevelt's interest induced him to give 
expression to the following sentiments at the annual 
dinner of the American Institute of Architects: 
"Whenever hereafter a public building is provided 
for and erected, it should be erected in accordance 
with a carefully thought-out plan adopted long 
before, and it should be not only beautiful in itself, 
but fitting in its relations to the whole scheme of the 
public buildings, the parks and the drives of the 
District. * * * Now 1 most earnestly hope that 
in the national capital a better beginning will be 
made than anywhere else; and that can be made 
only by utilizing to the fullest degree the thought 
and the disinterested efforts of the architects, the 
artists, the men of art, who stand foremost in their 
professions here in the United States, and who ask 
no other reward save the reward of feeling that they 
have done their full part to make as beautiful as it 
should be the capital city of the Great Republic." 

Mr. W. B. King has kindly furnished the follow- 
ing account of the development of music as an art in 
Washington. 

The leading musical organizations are the Choral 
Society, the Georgetown Orchestra, the Saenger- 



106 Washington as a Fine Art Center 

bund, nnd the Musical Art Society. The first of these 
is now twenty-three years old and has devoted itself 
to the larger choral works. The second, organized 
the same year as the Choral Society, is composed of 
amateurs with such professional players for public 
concerts as cannot be supplied from the amateur 
ranks. Its programs have been of a high character 
and its work has always reflected credit upon its 
conductor and members. Mr. Josef Kaspar is con- 
ductor of both organizations. The Saengerbund has 
a male chorus, conducted by Mr. Henry Xander, and 
gives a number of concerts in the club house every 
year and several public concerts. The Musical Art 
Society, a chorus of about thirty choir singers, under 
the direction of Mr. Sydney Lloyd Wrightson, 
devotes itself to the presentation of the lesser choral 
compositions. 

GLENN BROWN. 




o 
h- 
o 
z 

z: 
< 



O 



O 



O 
z 

LU 
> 



o 






WASHINGTON AS A 
CONVENTION CITY 



WHEN the people of the United States author- 
ized the Federal Government to accept the 
cession of territory for the establishment 
of a National Capital, they then and there deter- 
mined upon the foundation of "The People's City." 
They willed that their capital should not belong to 
any sovereign state, but that it should be owned in 
common by all alike, and be governed by their repre- 
sentatives elected to sit in the Federal legislature. 
It is the duty of the people therefore to frequently 
visit their own city, in order that they may see for 
themselves how their representatives have admin- 
istered the trust contlded in them, and to call them 
to account if they should permit the capital of the 
greatest nation in the world to be other than the 
fairest city under the sun. 

Nature herself has done much to make its site 
ideal. She has given it a noble river, for promoting 
the wealth and pleasure of its inhabitants ; hills and 
valleys beautiful with their mantles of green ; a 



108 Washington as a 

stream meandering through one of the loveliest 
regions in the country ; a section set apart through 
tlie wisdom of Congress for a great National Park 
and cared for as sucli; and a climate mild and 
healthful. What wonder that when the people 
entrusted to the one man in whom they all had con- 
fidence, the selection of a site for the Federal City, 
he chose this spot, which a grateful Republic in his 
honor, named "Washington!" 

The shrine to which the American people natur- 
ally turn is Mount Vernon, an estate located pictur- 
esquely on the banks of the Potomac River, the 
home of our first President. This spot may be 
reached by boat after a ride of sixteen miles through 
pleasant scenery, or by trolley through the historic 
town of Alexandria. A short distance further down 
the Potomac is Indian Head where the United States 
government has established a testing plant for naval 
ordance. On the Virginia bank of the Potomac, 
opposite Washington, is Arlington, the former home 
of General R. E. Lee, now the final resting place of 
thousands of the distinguished officers and soldiers 
of the Civil War. Immediately adjacent is Fort 
Myer, the largest cavalry post in the United States. 

When the people determine to assemble in con- 
vention, where should they go but to their own 
city, where they are at home? Do they come to 
discuss literary matters or scientific problems? Here 
are thirty-four great libraries of the government con- 
taining over two and one-half million books and 
pamphlets; and its wonderful laboratories are freely 
open to aid them in their research. Is it the American 
lawyers who come to determine upon what lines 



Convention City 109 

uniform legislation should be shaped? Here they 
meet tiie chosen representatives from every section 
of the land, ready to help and advise, and the mem- 
bers of the highest judicial tribunal in the world with 
the inspiration of their presence. Do the manu- 
facturers and business men wish to meet where they 
can have at tirst hand the fundamental facts and 
statistics which govern trade relations throughout 
the world? The experts at the command of the 
various Departments are at their disposal with the 
data which the people's money has been spent to 
collect. Or perchance it is the bankers who wish to 
decide the policies which shall govern the financial 
relations of their countrymen. Here they find the 
great Treasury Department and the men who control 
tiie National Banking System, to meet whom f:ice to 
face must promote a more thorough and cordial 
understanding of the needs of the Nation and the 
best manner of satisfying the wants of the people. 

The great public buildings which adorn our 
streets constitute an object lesson worthy the study 
of the American architect. The beautiful parks in 
the city limits, three hundred and two in number 
and comprising four hundred and seven acres, as 
well as the thousands of acres immediately adjacent 
to the city included in Rock Creek Park, Potomac 
Park and the Soldiers' Home Grounds, are a source 
of delight to the municipal engineer and landscape 
gardener and form charming retreats for those who, 
wearied with the labors of the day, seek rest in 
their shade, while listening to the music of the 
military bands. The naturalist loves to study 
nature through the great living collections at the 



110 Washington as a Conven tion City 

National Zoological Park, and the many specimens 
carefully preserved in the Smithsonian Institution 
and Department of Agriculture And the student of 
history can find in the National Museum material 
for study and thought. 

For the accommodation of its visitors and their 
meetings, Washington has provided hotels which 
rival those of any city ; and halls and theatres 
abound. The status of Washington as the natural 
meeting place of patriotic bodies is determined in the 
erection of their Continental Hall by the Society of 
the Daughters of the American Revolution ; and 
now that the construction of an immense Convention 
Hall for the accommodation of the great political 
conventions, is assured, there can be little doubt 
that hereafter these gatherings will be held here, as 
they properly should be. 

The invitation is extended. Come to us ! See 
and know your own city. Bring to it your best; 
and receive at its hands the wealth of knowledge 
and entertainment which you yourselves have been 
storing here for the benefit of all the people alike, and 
receive too from its open-hearted residents a sincere 
and cordial v/elcome ! 

WALTER COLLINS CLEPHANE. 





1/1 
O 

O 
u 



O 

>- 

en. 

< 




IMPROVING AND BEAUTIFYING 
THE NATION'S CAPITAL 



VISITORS for the first time to Washington who 
come for a short stay and with a special sub- 
ject to occupy their time can quickly see the 
out-door objects of interest which are the finest as 
well as the nearest; in nature, the lawns and groves 
of the Capitol, the White House, the Smithsonian 
Institution, the Agricultural Department, the Botani- 
cal Garden, the Soldiers' Home, Arlington, and Fort 
Myer, the Riverside Drive and Potomac Park, and 
above all of the Zoological Grounds and Rock Creek 
Park; in architecture, the Capitol, the Washington 
Monument, the White House, the Congressional 
Library, the Peace Monument, the Department 
Buildings, the Smithsonian, and the National 
Museum, within which edifices are to be found 
books, statues, pictures, and governmental works, 
various and most absorbing; in art, the statues of 
Presidents Washington, Jackson, Lincoln, and Gar- 
field, Chief justice Marshall, Marquis de La Fayette, 



112 Improving and Beautifying 

Count de Rochambeau, the Emperor Frederick the 
Great; Generals Greene, Scott, McPherson, Thomas, 
Sherman, Hancock, Logan, and Rawlins; Admirals 
Farragiit and Dupont; Professors Henry, Gross, 
and Hahnemann; of Benjamin Franklin, Daniel 
Webster, and Martin Luther. 

Those visitors who are able to give more time 
can extend their out-of-door visitations to Mount 
Vernon, and to Cabin John Bridge and the Great 
Falls of the Potomac, making trips long to be remem- 
bered, and can linger in the Patent Office, the 
Government Printing Office, the Bureau of Engrav- 
ing and Printing, and the Gun Factory at the Navy 
Yard, the Fish Culture Exhibit, the Botanical Garden, 
the Lincoln Museum, and the Halls of the Ancients. 

Every true American who may thus see the 
most attractive features of his capital — its natural 
beauties and its imposing edifices — will feel rejoiced 
at the work which has been done here in a single 
century— a short period compared with the life of 
the capital cities of the old world. But he will also 
realize the many deficiencies and be clearly con- 
scious of the additional work which is yet to be 
done to make Washington a national metropolis, 
worthy the country which it represents. 

The Park Commission — Messrs. Burnham, 
McKim, St. Gaudens, and Olmstead — planned a 
grand scheme for improving and beautifying the 
city by a parkway eight hundred feet wide from the 
White House and the Washington Monument to 
the Capitol, and by other far-reaching changes. 
Perhaps it is too much to expect that Congress will 
at once adopt this plan in its entirety. But what 



THE Nation's Capital 113 

may be fairly asked is that nothing shall be done 
which will prevent improvement and development 
along the lines proposed, by successive movements 
from time to time directed by Congress. 

What should be authorized and done immedi- 
ately may be stated as follows: 

I. The removal of all private buildings from the 
south side of Pennsylvania Avenue from the Capitol 
to the White House — this being a part of the plan 
of the Park Commission which everybody com- 
mends and which will not be expensive if carried 
out before more buildings are erected. 

II. The removal of all dwelling-houses and 
other objectionable structures in alleys in the centers 
of the squares of the city. The alleys as originally 
laid out seemed unobjectionable, but they were not 
intended as now used for dwellings, and as now 
used they are blots upon Washington which should 
be quickly suppressed. This should be the fust 
part of a careful system for improving the few local- 
ities which can be called slums and constructing 
model dwelling houses for the poor. 

III. The completion of embankments on lower 
Rock Creek, of the Eastern Branch, and of the 
Potomac River proper, including the Virginia shores. 
There should be obtained, if necessary, the cession 
once more from Virginia of that part of the original 
District of Columbia south of the Potomac. 

IV. The improvement and beautification of 
Riverside Drive and Potomac Park, which embrace 
600 acres of land just above and below Long Bridge. 

V. The adornment in every possible method 
known to modern landscape architecture of Rock 

[9] 



114 Improving and Beautifying 

Creek Park, whose present beauties are most 
impressive. 

VI. The opening of more parks and play- 
grounds for children; the adoption of the best plan 
for the growth of the city outside of Boundary 
Street, the proper treatment of streets and avenues, 
including the limitation of the heights of buildings; 
and above all the unrelenting and persistent enforce- 
ment of the present law against the emission of 
black smoke. 

In pressing forward tliese and other plans, every 
friend of the capital should be inspired by reading 
the following: 

(i) The resolution of the American Park and 
Outdoor Art Association, now the American Civic 
Association, indorsing the plans of the Park Commis- 
sion and asserting that the beauty and grandeur of 
the National Capital "are matters of national impor- 
tance of deep interest to every citizen of the Union." 

(2) The admirable letter to Speaker Cannon 
written by Mr. E. J. Parker of Quincy, Illinois, on 
July s, 1904, asserting that "in the District of 
Columbia is the nation's opportunity to illustrate the 
gospel of beauty with utility on an imperial scale." 

(3) Professor L. H. Bailey's book on The Out- 
look to Nature advocating "landscape architecture" 
on a grand scale, "art out of doors," "great pictures 
out of doors;" urging that "we shall assemble the 
houses, control the architecture, arrange the trees and 
the forests; direct the roads and fences, display the 
slopes of the hills, lay out the farms, and remove every 
feature that offends the sensitive eye;" that these 
shall be among "the great art efforts of the future." 



THE Nation's Capital 115 

The foregoing measures for making Washington 
attractive and beautiful and all otiiers which should 
accompany or follow them should be authorized by 
Congress and paid for with the nation's money, and 
only those taxes should be paid by property owners 
in Washington which are not above the average of 
those paid in other American cities. The present 
rate is $1.50 for each $100 of a fair valuation of the 
property. Such taxes being collected and placed in 
the national treasury the United States should pay 
all the expenses of carrying on the local government 
and of beautifying and adorning the city; which 
should be much more than double the amount of 
the taxes annually paid by the property holders. 

There is no reason why the nation should 
expend its money to adorn and beautify any other 
one of its great cities. There is every reason why 
it should so expend its money in Washington. A 
nation's capital is an exception to all its other cities. 
For the nation to help any other city would be invi- 
dious and unjust; for it to help its one capital is fair 
and right. All the other cities are interested in mak- 
ing the capital what it should be; all suffer if it is a 
discreditable capital; and the citizens are willing to 
contribute their share towards making their capital 
a joy and a delight to all the people of the nation. 

it is true that the plan thus advocated may tend 
to make Washington the most desirable city for 
residence which the country can offer; may cause 
people of culture and wealth to com.e here in 
abounding numbers. But such a result will arouse 
no jealousy; the beauty and prosperity, attractive- 
ness and renown of Washington will help one sec- 



116 Improving and Beautifying the Nation's Capital 

tion of our common country no more than another; 
and equality of benefit to the whole country being 
secured, all sections will rejoice and be benefited by 
such improvements and adornments as will make 
Washington the noblest capital city of all the 
nations; created by the willing gifts of the most 
prosperous country of them all. 

Every citizen of our Union living outside of the 
District of Columbia should have at least three 
localities which he dearly loves and to aggrandize 
which he is willing generously to give his influence 
and his money ; namely (i) his Home Town or city, 
(2) the Capital City of his state, and (3) the Capital 
City of his country ; the city founded by the leader 
of the struggle which made us a nation — the city of 
George Washington. 

WILLIAM E. CHANDLER. 




Financial Institutions 



( nr OIRC f T0R4 h -10 Qt 



iPPXPMACmVER BANK 




fiiS^ 





NT 



Q 

LU 
< 

u 
< 

ca 

d 

u 
O 
z: 






t£ 






EARLY BANKS AND BANKING IN 
THE DISTRICT OF COLUMBIA 



THE first bank established within the present 
limits of the District of Columbia was the 
Bank of Columbia, chartered by an act of the 
General Assembly of Maryland, December 28, 1793. 
This bank enjoyed the distinction of being the 
second bank ever chartered by the General Assembly 
of Maryland. Its capital was $1,000,000. The bank 
was authorized to have succession until Congress 
should have jurisdiction over the District and until 
they should by law annul the charter. It was 
located on the north side of M Street, near Thirty- 
fourth Street. 

This institution was the first and only bank ever 
permitted in the history of the government to main- 
tain for a number of years a branch office located in 
the United States Treasury Building. When the 
Capital was partially destroyed by the British in 1814, 
the branch office was removed to Ninteenth Street 
and Pennsylvania Avenue. The business of the 



120 Early Banks and Banking 

branch was largely that of a fiscal agent and a 
depository of the government funds. Its affairs were 
finally liquidated about 1828. 

The second banking institution to be organized 
in the present District and the first in the city of 
Washington proper was the Bank of Washington. 
It was originally a co-partnership concern organized 
under articles of association on September 1, 1809. 

In the Intelligciucr of December 20, 1810, can 
be found a copy of a Memorial of sundry citizens of 
Washington praying Congress for the incorporation 
of the Bank of Washington. This was the first appli- 
cation with the exception of the Bank of North 
America and the Bank of the United States, ever 
presented by sundry citizens to the Congress of the 
United States or to the Continental Congress 
requesting them to incorporate a banking institution. 
It was also the first banking institution with the 
exception of the United States Bank required by 
Congress to furnish at regular intervals a complete 
report of its affairs to the Treasury Department. 

The Union Bank of Georgetown was incor- 
porated by an Act of Congress in 181 1. In Section 
28 of the Act, the Secretary of the Treasury was, 
with the exception of the United States Bank, 
authorized for the first time in the history of the 
government, to make a complete examination of the 
afHiirs of a banking institution. Previously the only 
information required to be furnished was the annual 
statements of the several local banks incorporated 
by Congress. 

On Marcli 3, 1817, Congress incorporated the 
Farmers and Mechanics Bank of Georgetown, organ- 



IN THE District of Columbia 121 

ized in 1814, and the Bank of Metropolis of Wash- 
ington, now known as the National Metropolitan 
Citizens Bank, which was also organized the same 
year. By subsequent acts the charters of the local 
institutions were extended to 1844, after which date 
Congress refused to renew the charters of the 
local banking institutions. The affairs of these 
banks then passed into the hands of trustees 
under whose management for the benetlt of stock- 
holders, they were carried on. 

Of the various local banking institutions incor- 
porated from 1792 only four survived until iSso. 

In addition to the incorporated banks in 1850, 
there was the banking house of Corcoran and Riggs, 
afterwards known as Riggs and Company, estab- 
lished in 1840, and now The Riggs National Bank. 
Another institution, engaged in banking at that time, 
was the Washington City Savings Bank, established 
in 1847, which was succeeded by the banking house 
of Lewis Johnson and Company in 1858. 

Although there was no provision in the charter 
of the first Bank of the United States to establish a 
branch bank in this city, nevertheless the directors, at 
the request of the Secretary of the Treasury, shortly 
after his Department was transferred to Washington 
in I So 1 , established a branch here for the convenience 
of the government. 

To the credit of the Washington branch of the 
second Bank of the United States it can be said that 
it always paid its proportion to the parent bank on 
dividend account, and finally when wound up paia 
back its capital of $500,000 and nearly $200,000 
additional. 



122 



Early Banks and Banking 



That the local banks during this early period 
were earnest supporters of the government, and 
especially during the war of 1812 to 1814, is clearly 
shown in the report of the Secretary of the Treasury 
to Congress for 1812, in which he points out that 
Washington was the fifth largest money lender to 
the government during that year, being only excelled 
by Boston, New York, Philadelphia, and Baltimore. 

From iSso to 1803 a number of private bankers 
established themselves in this city to carry on a 
general banking and brokerage business. There 
were also a large number of local " wild-cat "" banks, 
organized about this time, whose sole object was to 
issue currency for foreign circulation. The currency 
of all the local Banks on a number of occasions was 
brought into disrepute by reason of the worthless 
currency of these fictitious concerns. 

What was true in the District of Columbia, 
however, in regard to these paper manufacturing 
concerns, known generally as Banks of Issue, also 
prevailed in many of the States. 

CHARLES E. HOWE. 





UJ 
UJ 




z: 

LU 
UJ 



Z 
< 

LU 

:d 
z 

UJ 

> 
< 

< 

Z 
< 

> 

1 

>- 

I/O 

Z 

z 

UJ 
Ou 

Q 

Z 
< 

v: 

o 
>- 

UJ 

Z 
u_ 

o 

z 
O 

I- 
u 



UJ 



UJ 

U 

O 
Z 

z 
< 



v^r j ^i^" j^y^'f y^j^Mte^-^w^^v -ij^ ' 




THE BANKS OF THE CITY 
OF WASHINGTON 

THE past ten years have witnessed a develop- 
ment of banking power in the United States 
without parallel in our country's history. An 
enormous increase in national wealth has taken 
place as the result of a decade of uninterrupted 
prosperity. The figures of commercial and indus- 
trial growth are astounding in their magnitude, and 
perhaps in no other manner can this great advance- 
ment be so clearly shown as by a comparison of the 
resources of national banks according to the state- 
ments of the Comptroller of the Currency for 189^ 
to 1905. Between these years the totals have more 
than doubled, the September statement of the 
former year having given the resources of all national 
banks as $3,423,000,000 and that of May, 1905, as 
$7,327,000,000. Where has there ever before been 
an instance of such remarkable growth ? Looking 
into the causes thereof it can easily be demonstrated 
that two great factors exercised a potent intluence 



124 The Banks of the 

in this increase of wealth, one the final and conclu- 
sive settlement of the vexed and disturbing ques- 
tions relating to our money standard, and the other 
a gathering of strength and a husbanding of material 
resources during the lean years following the panic 
of 1893. With the restoration of confidence all the 
pent up energies of a country rich in men and 
means burst into activities, varied and stupendous. 
Small wonder is it therefore, that the banking 
statistics of cities and sections are dazzling in the 
picture they present of universal good times — of a 
prosperity so far beyond our dreams of riches as to 
make this literally a golden age. 

Washington lays little claim to pre-eminence as 
a manufacturing or trade center, although its com- 
merce is by no means inconsiderable; but, wanting, 
in a larger sense, these factors in the production of 
wealth, the city might naturally be expected to lag 
somewhat behind other communities of equal popu- 
lation more favored in these respects. And yet, 
within the last ten years, the banking institutions of 
the capital have shared in full measure v^'ith other 
cities in the general growth. Within this brief period 
the resources of our national banks and trust com- 
panies, not including savings and private banks, 
have nearly trebled, having increased from $2b,ooo,- 
000 in 1895 to $70,000,000 in 190s. Without the 
benefit of extensive manuf;ictures or a great trade, 
Washington has about kept pace with the prosperous 
commercial cities of Louisville, Minneapolis, St. Paul, 
New Orleans, Detroit, and Omaha, it hardly seems 
possible that with a population largely dependent 
upon fixed incomes that so great an advancement 



City of Washington 125 

could have been accomplished. Nevertheless, the 
figures speak for themselves, and now it is proper to 
accord the capital the reputation of being one of the 
important financial centers of the country. 

Singularly enough, for some years Washington 
was slow to appreciate the advantages of the 
national system. Quite a number of our leading 
national banks of this day are the successors of old 
and conservative nouses that clung tenaciously to 
time honored names and reputations and were loath 
to make a change in name, even after the undoubted 
benefits of Federal supervision became apparent. Of 
our present national organizations only one accepted 
membership in the sixties, three in the seventies, 
three in the eighties, three in the nineties, and two 
since 1903. 

At present there are twelve national banks in 
Washington. Their combined capital is $4,827,000, 
surplus and undivided profits, $3,750,000; individual 
deposits. 122,51 1,000; loans and discounts, $18,347,- 
000; total resources, $41,880,000. These banks and 
their geographical distribution are as follows: 

The Riggs National Bank, successor to Riggs & 
Company, the National Metropolitan Citizens Bank, 
The Commercial National Bank, and the American 
National Bank are located in what may be termed 
the uptown financial district, and convenient to the 
United States Treasury; the Columbia National 
Bank, near Ninth and F Streets, the Traders National 
Bank, Tenth Street and Pennsylvania Avenue, the 
Lincoln National Bank, Seventh and D Streets, the 
Central National Bank, Seventh Street and Penns>'l- 
vania Avenue, the National Bank of Washington, 



1^^ The Banks of the 

Seventh Street and Louisiana Avenue, and tlie 
Second National Bank on Seventh Street, between 
E and F Streets, are in what may be described as the 
retail sections of the city; while the business of 
Capitol Hill is taken care of by the National Capital 
Bank, Pennsylvania Avenue, between Third and 
Fourth Streets S. E., and that of Georgetown or 
West Washington by the Farmers and Mechanics 
National Bank, Thirtieth and M Streets. 

All these, representing as they do more than 
$40,000,000 out of $70,000,000 banking strength, 
manage to live together in harmony, although, like 
the various tribes of ancient Gaul, they "differ from 
each other in language, customs, and laws." The 
higher ethics of banking are cultivated, conservatism 
is fostered by all, and generally the common good is 
sought as eagerly as it is in other well regulated 
communities. 

Altogether, twenty-one institutions in the Dis- 
trict of Columbia have entered the national system 
since its inauguration in 1861. Of the nine which 
are not in existence, six have surrendered their 
charters either through voluntary liquidation or con- 
solidation, and three have failed. Of the failures, all 
occurred during the early history of national banking 
in the District, there having fortunately been no dis- 
asters of this character to record for more than a 
quarter of a century. Recently in a public state- 
ment, Thomas P. Kane, the Deputy Comptroller of 
the Currency, declared as follows: 

" Bank failures are disastrous and demoralizing to 
any community. Fortunately Washington has been 
free from such a calamity for a good many years. 



City of Washington 127 

There has not been a national bank failure in the 
District of Columbia since November i, 1878, and 
only three since the inauguration of the national 
bank system, forty-three years ago. There was 
neither a failure nor a suspension during the trying 
panic of 1893. At the present time the national 
banks of Washington are the approved reserve 
agents of ninety-seven other national associations, 
and for conservatism and efficiency of management 
our home banks and trust companies compare favor- 
ably with the best regulated banks of any city in the 
United States." 

While the past, both as to stability and progress, 
has thus been highly satisfactory, there is no reason 
to doubt that the future will be less so. If on the 
one hand the capital has not been favored by nature 
or the inclinations of its citizens as a place for the 
development of a great trade, on the other it may be 
said that it is free from the vicissitudes usually 
visited upon cities of greater commercial pretensions. 
A reasonable explanation for the mighty financial 
strides which Washington has made in recent years 
is to be found in an enumeration of its residential 
advantages and its civic virtues. The beauty of the 
city, the stability of its government, its freedom from 
municipal disorders, its immunity from strikes, the 
solvency and regularity of its great paymaster Uncle 
Sam, the delightful salubrity of its climate — all these 
serving to drav/ hither those whose fortunes have 
been won in less peaceful and more precarious 
marts— are doubtless among the leading causes of its 
progress. More and more the country at large is 
learning these advantages, and everywhere among 



128 



The Banks of the City of Washington 



the people of the United States there is a growing 
realization that Washington is worthy of the republic 
and destined to be, if indeed it is not already, the 
most attractive capital city of the world. 

MILTON E. AILES. 





o 
z 

Q 

_j 

ca 

>- 

ZD 
in 
< 



< 

o 



O 

v: 
O 
O 



LU 
LU 
O^ 

H 
u_ 

o 
:^ 

LU 
> 

< 




THE TRUST COMPANIES OF 
WASHINGTON CITY 



FOR a number of years prior to 1890 charters 
authorizing corporations to perform the func- 
tions of trust companies in the District of 
Columbia were eagerly sought from Congress but 
without success. In consequence of failure to obtain 
appropriate legislation from Congress a number of 
prominent local financiers sought charters elsewhere. 

The Washington Loan and Trust Company, at 
the corner of Ninth and F Streets, began business in 
the District of Columbia in September, 1889, with a 
capital of $1,000,000, under a charter obtained from 
the State of West Virginia. 

Three months later the American Security and 
Trust Company, at No. 1405 G Street, began 
business with a capital of $i,2So, 000, under a charter 
obtained from the State of Virginia. 

On October 1, 1890, an act of Congress was 
passed entitled "An act to provide for the incor- 



fi-i 



130 The Trust Companies 

poration of trust, lonn, mortgage, and certain other 
corporations within the District of Columbia." 

This act marks the beginning of Congressional 
legislation in behalf of trust companies in the Dis- 
trict of Columbia and makes it impossible for any 
foreign corporation to operate as a trust company 
within the District unless it shall first re-incorporate 
under the provisions of the act. 

The act referred to provides for the incorporation 
of companies for the purpose of carrying on any 
one of the three following classes of business, 
namely: 

First: A safe deposit, trust, loan and mortgage 
business; Second: A title insurance, loan and mort- 
gage business: Third: A security, guarantee, in- 
demnity, loan and mortgage business. 

The required amount of capital is fixed at 
$1,000,000 with the provision that any trust com- 
pany organized under the act may also do a storage 
business when its capital stock amounts to not less 
than Si ,200,000. 

Immediately after the passage of this act the two 
trust companies above mentioned were reorganized 
under its provisions. 

On November i8, 1890, the certificate of the 
Comptroller of the Currency stating that the 
American Security and Trust Company had com- 
plied with the requirements of the act in respect to 
its organization was filed for record in the office of 
the local recorder of deeds and on December 15, 
1890, a similar certificate in respect to The Wash- 
ington Loan and Trust Company was filed for record 
in the same office. 



OF Washington City 131 

No change was made in the amount of capital 
stock of either of these two companies when the 
reorganization took place. 

In 1903 the amount of the capital stock of the 
American Security and Trust Company was increased 
to $3,000,000. 

The success of each of these companies was 
assured from its first day of active business. 

During the spring of 1891 The National Safe 
Deposit Company, located at Fifteenth Street and 
New York Avenue, which was originally organized 
in 1867 and which had been very successful, was 
reorganized in conformity with the provisions of the 
act of October i, 1890, under the name of The 
National Safe Deposit Company of Washington. 

immediately upon its reorganization the new 
company absorbed The National Savings Bank, 
which was organized in 1870, and which at the 
time of its absorption was operated under practically 
the same management as The National Safe Deposit 
Company and in the same banking house. 

The certificate of the Comptroller of the Cur- 
rency in respect to this company was filed for record 
on April 10, 1891. On February 18, 1892, the com- 
pany's name was changed to The National Safe 
Deposit, Savings and Trust Company of the District 
of Columbia. 

The prosperity of this company in its new and 
larger tleld has been very marked and uninterrupted. 

During the autumn of 1S99 the last one of the 
four trust companies now doing business in the 
District of Columbia was organized under the name 
of the Union Trust and Storage Company of the 



132 The Trust Companies 

District of Columbia with a capital of $1,200,000, 
and on February 3, 1900, the certificate of the 
Comptroller of the Currency in respect to this com- 
pany was made a matter of record. 

This company in its present location at No. 
14 14 F Street, under its new name of The Union 
Trust Company of the District of Columbia is in a 
prosperous condition. 

All of these companies were organized for the 
purpose of carrying on the class of business set out 
in Subdivision First mentioned above, with the addi- 
tion, however, of a storage business in the case of 
the American Security and Trust Company and The 
Union Trust Company. 

No serious efforts have been made to organize a 
trust company to carry on a title insurance business 
under Subdivision Second. This may be regarded as 
singular in view of the fact that this field is but 
poorly covered by the six title insurance companies 
now doing business in this District. 

On several occasions efforts have been made to 
interest capital in the formation of a trust company 
to do a security, guaranty, and indemnity business 
under Subdivision Third, but such efforts have not 
been successful and no such company has yet been 
organized. 

The local trust companies are authorized to 
accept and execute trusts of almost every character, 
such as receiver, assignee, executor, administrator, 
collector, guardian, and trustee. 

No bond is required to be given by a company 
conditioned for the due and proper performance of 
any trust conferred upon or vested in it, but its 



OF Washington City 133 

entire capital stock, an adciitional stockholders' liabil- 
ity equal to the amount of the capital stock and all 
of the property of the company are taken and con- 
sidered to be the security for the proper performance 
of the duties charged upon the company and are 
absolutely liable in case of default. 

The relations existing between the local banks 
and trust companies are entirely harmonious and no 
friction whatever has ever occurred. There is ample 
business for both classes of institutions and without 
exception both banks and trust companies are in an 
excellent condition of prosperity. 

Under the provisions of the act of Congress 
under which the local trust companies are organized, 
each of such trust companies is under the direct 
supervision of the Comptroller of Currency and is 
required to make an annual report to him not later 
than January 20, of each year. Such report must 
contain the amount of the company's capital stock 
and the proportion thereof actually paid, the amount 
of debts and the gross earnings for the year ending 
December 31, then next preceding, together with its 
expenses. 

In addition to this annual report each company 
is required to report to the Comptroller ot the 
Currency in the same manner as national banks are 
required to report under the provisions of sections 
5211, 5212 and 5213 of the Revised Statutes of the 
United States. The reports to the Comptroller are 
not less than five during each year and each report 
must be published in at least one newspaper issued 
in Washington. 

Each trust company is carefully examined by a 



134 



The Trust Companies of Washington City 



federal bank examiner twice during each year in tlie 
same manner as are national banks. 

It is perhaps doubtful whether the patrons of 
the local trust companies fully realize the extent to 
which their interests are protected by the excellent 
laws governing these companies. As a matter of 
fact their protection is practically absolute for the 
reason that their transactions are with institutions 
having large capital and enjoying the proud distinc- 
tion of being the only trust companies directly under 
the supervision and scrutiny of the Federal Govern- 
ment; an advantage not existing in behalf of the 
patrons of any other trust company in the United 
States. 

WILLIAM D. HOOVER. 




BANKOFTIIEUNIQ3f ^^^*H 







o 

No 

CO 



z 
< 

I/O 

O 
Z 

> 
< 

I/O 



< 

Z 

o 

< 




SAVINGS BANKS OF THE CITY OF 
WASHINGTON 



To seek the origin and trace the development of 
the early savings banks of Washington would 
be pleasing and instructive. The task would 
lead us through interesting periods of the develop- 
ment of the Capital City, and the broader tleld of 
national affairs would be traversed before the record 
was ended. Lack of space however forbids con- 
sideration of banks that no longer exist, and the 
subject must be ended with the statement that in 
the year 1891 Washington could boast of only a 
single savings bank. Liquidations and changes to 
other systems of banking had cleared the field. Two 
trust companies, recently organized, and the one then 
existing savings bank, since incorporated into a trust 
company, were the only institutions at that time 
which received savings deposits subject to the 
payment of interest. The seven savings banks in 
Washington now operating as such are of recent 
origin. The oldest was organized in 1891. The 



136 Savings Banks of the 

youngest began business in mo5, of the otliers, one 
was incorporated in 1898, one in 1899, two in 1903, 
and one in 1904. 

The laws of the District of Columbia permit any 
three or more persons who desire to form a company 
for the purpose of carrying on any enterprise 'or 
business which may be lawfully conducted by an 
individual, excepting banks of circulation or discount 
and certain other enterprises specifically referred to, 
to execute a certificate in writing and file the same 
with the Recorder of Deeds. After this certidcate 
shall have been tiled in the manner prescribed by law 
the persons who signed and acknowledged it become 
a body politic and corporate in fact and in name. 
Under this section of the code of laws savings bank 
corporations may be formed, but the reference to 
banks of circulation and discount implies that sav- 
ings banks organized under the laws of the District 
of Columbia cannot do a mixed banking business, 
they must confine their transactions to such as are 
implied by the nature of a savings bank. This 
feature of the incorporation laws caused six of the 
Washington savings banks to become foreign corpo- 
rations, because the organizers desired to conduct 
banks that should be both savings banks and 
commercial banks. 

These banks solicit two classes of accounts: 
First. Commercial deposits, which are received 
subject to payment on demand, and on which 
interest is not allowed. These depositors demand 
and receive the same consideration that is granted 
depositors in commercial banks. Their checks are 
paid on demand, their paper is discounted and taken 



City of Washington 137 

for collection, and money is advanced for their needs 
if they are engaged in business enterprises. 

Second. Savings deposits, the withdrawal of 
which is subject to the right of the banks to demand 
thirty, sixty, or ninety days notice of the intended 
withdrawal as their by-laws may provide. These 
deposits earn interest at the rate of three per cent 
compounded semi-annually. 

Among the savings banks the favorite form of 
investment is the loan secured by first deed of trust 
or mortgage on real estate in the District of Colum- 
bia and the nearby counties of Maryland. Some 
loans are made on collateral, the stocks and bonds of 
local enterprises and those listed on the exchanges 
of Baltimore, Philadelphia, and New York being 
accepted as security. Another line of investments 
which is highly regarded and sought by the banks 
as a measure of safety by keeping part of their 
assets in a readily convertible form, comprises muni- 
cipal and railroad bonds. Although the return is 
small the security is good and adds to the strength 
of the institution. Owing to frequent demands 
from commercial depositors the percentage of avail- 
able cash is higher than that usually carried by sav- 
ings banks. Careful analysis of published state- 
ments indicates that as a whole the savings banks of 
Washington compare favorably with the national 
banks in the matter of strength and conservative 
management. 

"Nearly S6oo,ooo is invested in the capital of the 
savings banks actively engaged in business. The 
deposits, commercial and savings, are $3,500,000. 
At least three-fourths of this business has been 



138 



Savings Banks of the City of Washington 



developed during the past seven years. Since July i 
of this year one of the most successful savings banks 
has decided to establish two branches, one in the 
northeastern part of the city and another in the 
southwestern section. 

The rapid growth of these banks and the fact 
that they are not subject to governmental or muni- 
cipal supervision have caused the Commissioners of 
the District of Columbia to prepare, with the aid of 
the Comptroller of the Currency, a bill to be sub- 
mitted to Congress at the coming session which, if 
enacted into law, will place all incorporated banks in 
the District of Columbia under the supervision of 
the Comptroller of the Currency and give that 
officer power to make examinations and to make 
such regulations as he may deem proper for their 



management. 



JOHN E. HERRELL 





ALBERT OALLATI 




FOREIGN COMMERCE AND 
INTERNATIONAL BANKING 



As the center of our national life Washington 
is vitally concerned in the development of 
the country's commerce, foreign as well as 
domestic, and it is to Washington that the country 
looks for legislation that will foster the foreign trade 
which is yearly becoming more necessary to the 
country's welfare. 

The present time is opportune for the consider- 
ation of the subject of our foreign trade, for we are 
rapidly approaching the period when our domestic 
supplies will exceed the capacity of our home and 
the demand of our foreign markets. The internal 
commerce of the United States to-day amounts to 
twenty-five billion dollars, while its foreign trade is 
equal to only one-tenth of that amount, and its 
exports of manufactured goods to less than two per 
cent. With seventy per cent, of the banking power 
of the world, with unlimited credit, with an immense 
population, whose working units are more numer- 



140 Foreign Commerce and 

OLis, more intelligent, and more competent than 
those of any other country; with a superabundance 
of raw material and the cheapest transportation; 
with all these factors, tending irresistibly to an 
enormous output, and with, in addition, an unrival- 
led geographical position, it is discreditable to this 
country that its natural markets should be taken 
from under its eyes by more distant and less 
fiivorably conditioned countries. 

The termination of the Russo-Japanese war. 
The digging of the Panama Canal, and the closer 
proximity to the world's markets which it will 
bring, the extraordinary rate at which the Orient is 
being gridironed with railroads and opened up to 
trade, the steps proposed for putting the different 
Asiatic currencies on a stable basis, and the rapidly 
approaching time when the Orient's eight hundred 
millions of population, instead of earning from ten 
to fifteen cents a day will begin to earn fair wages — 
all these portend an era, by no means distant, of 
abnormal business activity and of great reward for 
those countries that capture the Eastern Trade. 

The value of these foreign markets can be measur- 
ably determined by the efforts made to secure them, 
and there is perhaps no better way to estimate 
Europe's opinion of the importance of her foreign 
trade than by observing the banking capital she has 
embarked in it. The indefatigable way in which 
Germany fosters her gigantic trade by means of her 
great "mother" banks is well known. Aside from the 
enormous capital which England, like Germany, has 
devoted to the e.stablishment of steamship lines to 
foster her foreign trade, the banking power of the 



International Banking 141 

United Kingdom in her sixty colonial and foreign 
banks, with two thousand seven hundred and fifty 
branches, is two and a half billion dollars, or pre- 
cisely one-half that of her domestic banks, while 
the foreign banking capital of the United States, as 
represented by incorporated establishments, is less 
than one four hundreth part of that of its domestic 
banks. That the British international banks find the 
business profitable is apparent by the high premium 
commanded by their stock, and it is fair to assume 
that when banks prosper, the trade they represent, 
and of which they are the concrete manifestation, 
prospers also. 

it may be of interest to know that while these 
British international banks accept long-time deposits 
from the mother country to aid in the development 
of its foreign trade, they do not compete with home 
banks for domestic business, and so far from there 
being any rivalry between the two, there is the 
heartiest co-operation. The international bank 
supplements the domestic bank by taking up the 
work of commerce where the other lays it down. 
It is recognized that a country's foreign trade can no 
more flourish without banks and steamship lines of 
its own nationality than an army in the tleld can 
exist without transport and commissary departments, 
and that without the foreign commerce which these 
have supplied the United Kingdom would have 
remained financially what she is physically, a dwarf 
among giants, instead of the greatest of them all. 

In entering upon a keen competition with such 
old established rivals as England and Germany, the 
United States would be at a disadvantage at the 



142 Foreign Commerce and 

outset, for they have already gained a great head- 
way. Still even as things are American capital and 
enterprise have developed considerable American 
trade, and if national, state, and international banks 
work together in the United States as banks do else- 
where, there is no reason why the important work 
already done should not be made the basis of a 
foreign commerce commensurate with our vast 
internal trade. 

It is manifestly worse than useless to spend 
lumdreds of millions of dollars on irrigation works 
for the purpose of increasing the area of our farm 
lands unless we take steps to widen the narrowing 
markets for our agricultural produce; and it is a 
waste of good capital to develop our water-power 
electrical plants by hundreds of thousands of horse- 
power, if we permit the markets for our manufactures 
to be shut in our face. 

Nothing would so appropriately crown our 
present Administration as tliat the executive and 
legislative bodies should unite to promote foreign 
commerce by every means in their power. Our 
present Bureau of Commerce and Labor is doing 
excellent work in promoting foreign commerce, and 
our consuls are constantly urging upon the country 
the necessity for special effort to occupy the held 
so rapidly being covered by other countries. These, 
however, are but index fingers pointing the way 
which the country should lollow. 

Prompt action is needed to-day if we would not 
take up a long and hopeless stern chase in the wake 
of Germany and England. 

Let our banks decide that the United States 



International Banking 



143 



shall take its proper and commanding place among 
the world's exporters, and the thing is half accom- 
plished. With the growth of exports remittances 
would come to this country from all parts of the 
globe until our increasing commerce made New York 
the money center of the world, where all differences 
would be settled, and bills upon New York would 
take the place of bills on London, to the great gain 
and advantage of this country as well as of its banks, 
if our foreign markets are not adequately developed, 
the limit to our banking prosperity is within sight; 
if it is promptly and properly developed there is no 
limit to it. Foreign commerce multiplies domestic 
banking power just as much as domestic trade. 

J. SELWIN TAIT. 




Appendix 



PROGRAM OF THE 3Jst ANNUAL CONVENTION 
OF THE AMERICAN BANKERS ASSOCIATION 
AT WASHINGTON, OCTOBER 10 TO J 3, 1905 

(§rhtv of l^vanthhi^s 



alniat (Cnmpaiia ^prtinn 

Convention held in the Assembly Hall of the New Willard Hotel, 
Tuesday, October 10th 

Called to order at 10 o'clock A. M., by the President, Mr. E. A. 
Potter. 

Prayer by Rev. Robert M. Moore, Washington City. 

Address of welcome by Mr. E. J. Stellwagen, President, 
Union Trust Company of the District of Columbia. 



i'ahtnga Sank i»frtimt 

Convention held in the Banquet Hall of Hotel Shoreham, 
Tuesday, October 10th 

Called to order at 10 o'clock A. M., by the President, Mr. 
Charles E. Sprague. 

Prayer by Rev. J. M. Schick, Washington City. 

Address of welcome by Mr. B. Frank Saul, President, Home 
Savings Bank, Washington City. 



148 Program 

Atttprtrau IBaukfrs AHsariattmt 

Convention held in New National Theater 

FIRST SESSION 

Wednesday, October 11th 
Called to order at 10 o'clock A. M., by the President, Mr. E. F. 

SWINNEY. 

Prayer by Rev. Randolph H. McKim, D.D., Washington City. 

Address of welcome by Hon. Henry B. F. Macfarland, 
President of the Board of Commissioners of the District 
of Columbia. 

Address of welcome by Mr. John Joy Edson, President, 
District of Columbia Bankers Association. 

Address of welcome to the American Bankers Association and 
foreign visitors in behalf of the United States Govern- 
ment. 

Reply to addresses of welcome and annual address by the Presi- 
dent, Mr. E. F. Swinney. 

Annual reports of officers and committees. 

Discussion of practical banking questions. 

Address by Mr. Frank A. Vanderlip, Vice-President, National 
City Bank, New York City. 

Address, "The Examination of Banks," by Hon. William B. 
RiDGELY, Comptroller of the Currency. 



SECOND SESSION 

Thursday, October 12th 

Called to order at 10 o'clock A. M. 

Prayer by Rev. Teunis S. Hamlin, D.D., Washington City. 

Discussion of practical banking questions. 

Address, "Commercial Education," by Prof. Joseph French 
Johnson, Dean, New York University School of Com- 
merce, Accounts and Finance, New York City. 



Program 149 

Address, "The Scotch System of Banking," by Mr. Robert 
Blyth, General Manager, Union Bank of Scotland, 
Limited, Glasgow, Scotland. 

Address, "Practical Benefits of Membership in the American 
Bankers Association," by Mr. Walker Hill, President, 
Mechanics-American National Bank, St. Louis, Mo. 

Statements by bankers on the general condition of business in 
their respective sections of the country. 

THIRD SESSION 

Friday, October 13th 

Called to order at 10 o'clock a. m. 

Prayer by Rev. D. J. Stafford, D.D., Washington City. 

Discussion of practical banking questions. 

Address, "Our Commerce," by Mr. Harvey D. Goulder, 
Cleveland, Ohio. 

Address by Hon. Leslie M. Shaw, Secretary of the Treasury. 

Election and installation of new officers of the American 
Bankers Association. 

iEutrrtatumrut 

Tuesday, October 10th 

During day. Trips to Mount Vernon by trolley. 

7 P.M. Banquet tendered by the District of Columbia 

Bankers Association to the general officers 
and the council of the American Bankers 
Association. 

Wednesday, October 11th 

3-4.30 P.M. Reception by the President of the United 

States at the White House. 



150 



Program 



9 a.m. 4 p.m. Visits to the Treasury Department; (also 
between these hours on following days of 
Convention). 

During day. Trips to Mount Vernon. 

8.30 11 P.M. Reception by the Secretary of the Treasury 
and Mrs. Shaw at the Arlington Hotel. 

8-10.30 P.M. Special view of the Corcoran Gallery of Art 
tendered by the Trustees of the Gallery. 

Thursday, October 12th 

3 P.M. Trip to Arlington and Fort Myer, Virginia; 

complimentary drill and exhibition by the 
13th Regiment of Cavalry and the 3d Bat- 
talion of Artillery, United States Army, at 
Fort Myer. 

2 P.M. Trip down the Potomac River. 

2 4 P.M. Visits to public buildings. 

During day. Trips to Mount Vernon. 

8 P.M. New National Theater: William H. Crane in 

"The American Lord." 

8 P.M. Chase's Theater: Vaudeville. 



Friday, October 13th 

2 P.M. Trip down the Potomac River. 

2 4 P.M. Visits to public buildings. 

3 P.M. Trip to Arlington and Fort Myer; complimen- 

tary drill and exhibition by United States 
Cavalry and Artillery at Fort Myer. 

During day. Trips to Mount Vernon. 
8 10 P.M. Visit to the Library of Congress. 

8.30 P.M. Reception by the District of Columbia Bankers 

Association at New Willard Hotel. 



Each Day. Visits to the U. S. S. "Puritan" and other 

naval vessels in Washington harbor. 



laitkrrs Assnrtatwit nf tl|r 
itBtrirt of (Uolumbia 



iUcmbrrH : 

AMERICAN NATIONAL BANK 

AMERICAN SECURITY AND TRUST COMPANY 

BANK OF WASHINGTON 

BELL AND COMPANY 

CENTRAL NATIONAL BANK 

COLUMBIA NATIONAL BANK 

COMMERCIAL NATIONAL BANK 

CRANE, PARRIS AND COMPANY 

FARMERS AND MECHANICS NATIONAL BANK 

W. B. HIBBS AND COMPANY 

HOME SAVINGS BANK 

INTERNATIONAL BANKING CORPORATION 

LEWIS JOHNSON AND COMPANY 

LINCOLN NATIONAL BANK 

MERCHANTS AND MECHANICS SAVINGS BANK 

NATIONAL CAPITAL HANK 

NATIONAL METROPOLITAN CITIZENS BANK 

NATIONAL SAFE DEPOSIT, SAVINGS AND TRUST COMPANY 

RIGGS NATIONAL BANK 

SECOND NATIONAL BANK 

TRADERS NATIONAL BANK 

UNION SAVINGS BANK 

UNION TRUST COMPANY 

WASHINGTON LOAN AND TRUST COMPANY 

WASHINGTON SAVINGS BANK 



152 District of Columbia Association 



©ffirpra 

JOHN JOY EDSON, President 

C. F. XORMENT, First Vice-President 

\V. V. COX, Second Vice-President 

WILLIAJI A. MEARNS, Secretary 

F. H. SMITH, Treasurer 

(Couttril nf AbtniniatratTon 

S. Thos. Brown W. J. Flather B. F. Saul 

Chas. E. White 



Srlrgatc to Cnnurntion 

C. J. BELL 
Alternate: A. K. PARRIS 



Convention Committees 



153 



(Uommittofi uu Arrangrmputa far (Eouuruliuu 



^? 



lExeruttop (Uammittep 



JOHN 
M. E. AlLES 
C. J. BELL 
Geo. W. Brown 
S. Thomas Brown 
W. V. Cox 
Lewis J. Davis 
P. A. Drury 
A. F. Fox 
C. C. Glover 
ROBT. N. Harper 



joy EDSON, Chairman 



Geo. C. Henning 

J. W. HENRY 

John E. Herrell 
W. B. Hibbs 
Thos. R. Jones 
Wm. a. Mearns 
jno. h. moorb 
C. F. Norment 
James L. Norris 
E. S. Parker 



A. K. Parris 

B. F. Saul 

E. QuiNcv Smith 

F. H, Smith 
O. G. Staples 

E. J. Stellwagen 

F. c. Stevens 
J. Selwin Tait 
Jesse B. Wilson 




WASHINGTON NATIONAL BANKS 



CAPITAL 

SECOND WASHINGTON COLUMBIA 

LINCOLN CENTRAL 



Convention Committees 



155 



(dammittrf an SrrrptiBit 

CHARLES C. GLOVER, Chairman 
MILTON E. AILES, Vice-Chairtnan 



Charles J. Bell 
John Biddle 
Arthur T. Brice 
George W. Brown 
S Thomas Brown 
W. V. Cox 



George C. Henning Theodore W. Noyes 
J. William Henry Andrew Parker 



John E. Herrell 
Christian Heurich 
William B. Hibbs 
E. A. Hitchcock 



E. Southard Parker 
A. K. Parris 
J. B. Reynolds 
W. B. Ridgely 



George B. Cortelvou Frank H. Hitchcock B. F. Saul 



Walter C. Davidge 
L. J. Davis 
Elmer Dover 
P. A. Drury 
Geo. T. Dunlop 
John Joy Edson 
J. H. Edwards 
Henry H. Flather 
William J. Flather 
Albert F. Fox 
Daniel Fraser 
Thomas M. Gale 
Jules Guthridge 
RoBT. N. Harper 
Geo H. Harries 



James F. Hood 
Thomas L. Hume 
Thomas Hyde 
Charles A. James 
Thomas R. Jones 
Thos. p. Kane 
S. H. Kauffmann 
C. H. Keep 



Edgar D. Shaw 
J. Henry Small 
F. H. Smith 
E. J. Stellwagen 
Fred'k C. Stevens 
John A. Swope 
J. Selwin Tait 
H. A. Taylor 



H. B. F. Macfarland Joseph S. Waters 
Henry L. West 
Charles E. White 



S. J. Masters 

Fred'k B. McGuire 

William A. Mearns John F. Wilkins 

C. P. Minnigerode a. a. Wilson 

W. L. Mover Jesse B. Wilson 

Lawrence O. Murray Benjamin Woodruff 

C. F. Norment 



John C. Athey 
Augustus Crane, Jr. 
Geo. E. Fleming 



fflommittrr on iFittanrp 

A. F. FOX, Chairman 
R. H. Lynn E. Quincy Smith 

J. Gales Moore Fred'k a. Stier 

Albert b. Ruff 



(Bommittep ait lamiurt 



WILLIAM A. MEARNS, Chairman 
M. E. Ailes J. William Henry Arthur Peter 

George E. Fleming W. B. Hibbs J. B. Reynolds 

Geo. H. Harries C. F. Norment F. C. Stevens 

Andrew Parker 




WASHINGTON NATIONAL BANKS 



FARMERS AND MECHANICS METROPOLITAN CITIZENS 

AMERICAN 

COMMERCIAL TRADERS 



Convention Committees 



157 



Milton E. Ailes 
C. E. Howe 



Qlnmmittcp on iEntprtaiiiuifnt 

C. J. BELL, Chairman 

C. F. NoRMENT Andrew Parker 

Edson B. Olds E. J. Stellwagen 



John C. Athey 
E. p. Berry 
Arthur T. Brice 
J. Kendall Cain 
Clarence Corson 
V. B. Deyber 
John C, Eckloff 
C. W. Edmonston 
H. H. Flathkr 
Wm. J. Flather 
A. S. Gatley 



(fiontinittrr an National lanka 

JOHN H. MOORE, Chairman 
. W. WOODWARD, Vice-Chairman 

D. Agnew Greenlees J. Gales Moore 



B. W. Guy 
W. F. Ham 
Walter Heiston 
J. T. Hendrick 
Henry Hurt 
J. Miller Kenvon 
R. H. Lynn 
H. H. McKeE 
B. .S. Minor 
David Moore 



W. Wallace Nairn 
W. W. W. Parker 
A. B. Ruff 
Jacob Scharf 
F. A. Stier 
Chas. E. White 
Geo. W. White 
R. E. White 
John F. Wilkins 
Charles P. Williams 



Qlommtttre ait ®ruBt (Eam^aHtra 

EDWARD J. STELLWAGEN, Chairman 

THOMAS HYDE, Vice-Chairman 

GEORGE E. FLEMING, Secretary 



M. E. AlLES 
H. F. Bloont 
R. A. Chester 
J. J. Edson, Jr. 
Wm. J. Flather 
Daniel Eraser 



B. W. Guy 
R. N. Harper 
W. B. HiBBS 

James F. Hood 
T. L. Hume 
H. H. McKee 



W. A. Mearns 
Andrew Parker 
A. K. Parris 
J. Selwin Tait 
J. H. Small, Jr. 
A. A. Wilson 



A. G. Clapham 
Chas. H. Davidge 
Wm. F. Gude 



(Eommittfp nn g>amnga IBanka 

B. F. SAUL, Chairman 
;. QUINCY SMITH, Vice-Chairman 

Wm. A. Hill James F. Oyster 

Francis Miller T. W. Smith 

Brice J. Moses Geo. Truesdell 







PRIVATE BANKS OF WASHINGTON 



W. B. HIBBS & CO" 



BELL & CO. 

CRANE, PARRIS & CO. 

LEWIS JOHNSON & CO. 



INTERNATIONAL 



Convention Committees 



159 



(Hflininittrc an Stnrr iExturatan 

ALBION KEITH PARRIS, Chairman 



M. J. Adler 
Benjamin Alvord 
C. E. Bright 
L. S. Brown 
R. A. Chester 
C. H. Davidge 
W. Riley Deeble 
P. V. DeGraw 
F. L. Denny 
H. RoziER Dulany 
John C. Eckloff 
John H. Edwards 
John L. Edwards 
C. D. Galloway 
Louis Garthe 
F. B. Gilmore 
J. H. Gordon 
Wm. a. Gordon 
James m. Green 



J. Wm. Henry 

S. J. henry 

W. F. D. Herron 

Wm. Corcoran Hill 

James F. Hood 

W. D. Hoover 

Thos. L. Hume 

Ralph Jenkins 

T. P. Kane 

Wm. Ker 

L. c. Kerr 

J. C. Lawrence 

Ralph W. Lee 

F. E. Leupp 

Thos. Marshall, Jr. 

Henry S. Mathews 

H. H. McKee 

J. H. MOORB 

Hrice J. Moses 



S. G. Nelson 
R. E. Pairo 
John D. Patten 
G. W. Pearson 
John Poole 
Frederick W. Pratt 

F. H. Stier 

W. McK. Stowell 
S. W. Stratton 

A. L. Sturtevant 
Corcoran Thom 

G. A. Townsend 
Geo. O. Walson 
John L. Weaver 
C. E. White 

S. N. Whitwell 
Chas. p. Williams 

B. B. Wilson 
Downs Wilson 



ffiDHtmittrf OH iE.\riiratmi to iForl iHyer 



John Biddle 
Aldis B. Browne 
E. C. Brandenburg 
Alexander Britton 
John Callahan 
J. O. Carter 
E. B. Cassatt 
T. M. Corcoran 
S. M. FooTE 
Daniel Eraser 
Thos. M. Gale 



CLARENCE F. NORMENT, 
Edw. Graves 
Geo. H. Harries 
C. A. P. Hatfield 
W. B. HiBBS 
C. W. Howard 
B. B. Hyer 
T. W. Jones 
J. Wm. Lee 
P. D. Lockridge 
Frank P. May 
Edw. A. Millar 
Jay J. Morrow 



Chairman 
G. W. Moss 
Wm. H. Moses 
Harry Norment 
Andrew Parker 
Guy H. Preston 
A. li. Ruff 
Odell S. Smith 
Edw. Stevens 
W. M. Whitman 
A. A. Wilson 
Levi Woodbury 



Claminittce on lExruraion to £Mount Urrnon 

W. B. HIBBS, Chairman 



W. A. Mearns 



C. F. Norment 



160 



Convention Committees 



Scott C. Bone 
h. a. colman 



(Uommittrr mi tijr JPrrBB 



Charles E. Howb 
E. L. Keen 
Thomas C. Noyes 



r. v. oulahan 
Edgar D. Shaw 



(Cnmmittrc mi ®rlrgraplj an^ Srlrpljonp 

J. SELWIN TAIT, Chairvian 

F. H. Bethkl George Howard F. C. Prindle 

G. S. GiBBS J. H. Moore J. D. Prosser 
A. W. Greely J. M. Morgan H. F. Taft 



QIammtttrp mt ISaligrs 

ROBERT N. HARPER, Chairman 



J. H. Cranford 
Chas. a. Douglass 
P. A. Drury 
T. C. Dulin 
Stephen B. Elkins 
W. T. Galuher 
J. T. Hbndrick 
J. Whit Herron 



J. Miller Kenyon C. J. Rixey 



Blair Lee 
Irwin B. Linton 
C. H. Livingston 
R. H. Lynn 
B. S. Minor 
David Moore 
F. D. Owen 



CuNO H. Rudolph 
Wm. H. Saunders 
JAS. F. Shea 
Geo. F. walker 
N. Wallerstein 
J. C. Weedon 
Simon Wolf 



AuMtiitg (Unmmittrr 

S. THOMAS BROWN, Chairman 
George W. Brown William J. Flather Edward McC. Jones 
Chas. P. Williams 




82 5 



-<'^. s 






.■\ 



^'- %^— 



.^' ^.. 






"■fy. <^ 



^0^ 

■s -'■J. 






-^,^ 






1*0, ^ 









,/% 



a''^^'--^-. 



.-.s 






oV 



■^^ 









.^^^ 



, >-' 



"bo'* 






■^^, ^'^ 



^^.s"^-' 

.>:^'"^ 






1 



x^"^ "'"^-. 



,0 0^ 






..-^^ 



':% 






^^■ 



^</- .^\^' 
s^^^ 



.x^ 



,\-J 



^^ 



-^^^^ 



..-v 






x^' 









c^^ 



,0-. 






,d^ 



.v"^- 






^0 



■^"^ 






■i^ 






-bo^ 















•^..^' 






aV •/>, 



C^^' 






.«.^" 



--■Zy^ ■: 



-h ':, 



^^■' 



» ^ •> " " , > 






\\- 















\' ♦ 









,v s' 



,.^ 









.-V??' 



,0O^ 



d^ 



' ■- C' 



'/. * N " A^ 















A^^ 



> ■' 



a' 



A 



% 



t -^ o \ • ^ ^^< ■ '■■if *■ 






■b.o'^ 



.0 3 



o> 









.A-^- 












,0' 






^y- ^,•* 



.\'- 



s -u 



.0- 



.x* 



.^^' -/.- 






'"c^. ■ 



^4^ 



■X' 



>:?., .A^ .'^- ' -^ " 



.«.^ 



..•i 



^^% 



,A* 



X^b., 



-bo^ 

0> '"'^^ 






>0 o. 



••/• 



</^ 



v\. 









.<-^^ 



aV 



vX> '-.P 



■J- ,\\- 



-vO' 



-0^^ 



% 









.*^ 






>- V 



' l> n \ 



o> ^z:,. 






X' » ■ 



., «.. 



■X' 




fOf >'"_>v> '.>'.>««.' 



LIBRARY OF CONGRESS 



0DQlHD147Db 



iiiiiiiii 



ill 






likliimtiUt 



